graham corp.

Press release:

Graham Corporation (NYSE: GHM) (“GHM” or the “Company”), a global leader in the design and manufacture of mission-critical fluid, power, heat transfer and vacuum technologies for the defense, space, energy and process industries, today reported financial results for its first quarter ended June 30, 2023 (“first quarter fiscal 2024”).

Daniel J. Thoren, President and Chief Executive Officer, commented, “We had a better-than-expected start to the year with strong first-quarter results. We had improved execution, utilized our expanded capacity and are timely delivering to customer requirements, even as schedules may shift. We also benefited in the quarter from an unusually better mix of business and the timing of projects flowing through production. Importantly, we continue to strengthen our relationships with our defense customers, advance opportunities in the space industry and are positioning the business to serve the new energy markets with cryogenic solutions. The investments we made to meet defense customers’ delivery requirements have proven to be effective and was validated by the $13.5 million strategic investment we received to expand our capabilities and be ready to support future opportunities, if selected. We have earned the position of being a key strategic supplier to support the Naval Nuclear Propulsion Program.”

Separately, the Company announced today that it had received a strategic investment by a customer to expand production capabilities at its Batavia, New York facility.

He added, “While we delivered in the quarter, there is still much work to do to get where we need to be as an organization. We are making investments in infrastructure, information systems and people. We are evolving the culture of the Company as well. I have been excited to see how our teams are questioning and challenging each other. Everyone is stepping up to own our future. While we have made measurable progress these last two years, we will continue to drive to advance our operations to deliver on our goals to exceed $200 million in revenue and achieve low to mid-teen adjusted EBITDA margins by fiscal 2027.”

First Quarter Fiscal 2024 Performance Review (All comparisons are with the same prior-year period unless noted otherwise.)

($ in millions except per share data)

*Graham believes that adjusted EBITDA (defined as consolidated net income before net interest expense, income taxes, depreciation, amortization, other acquisition related expenses (income), and other unusual/nonrecurring expenses), and adjusted EBITDA margin (adjusted EBITDA as a percentage of net sales), which are non-GAAP measures, help in the understanding of its operating performance. Moreover, Graham’s credit facility also contains ratios based on adjusted EBITDA as defined in the lending agreement. Graham also believes that adjusted net income and adjusted diluted net income per share, which excludes intangible amortization, other costs related to the acquisition, and other unusual/nonrecurring (income) expenses, provides a better representation of the cash earnings of the Company. See the attached tables and other information on pages 10 and 11 for important disclosures regarding Graham’s use of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, and adjusted diluted net income (loss) per share, as well as the reconciliation of net income to adjusted EBITDA, adjusted net income, and adjusted diluted net income per share.

Net sales of $47.6 million increased 32%, or $11.5 million. Growth in the defense market, as well as improvements in the commercial aftermarket, more than offset softness in the refining industry and declines in the space market. Aftermarket sales to the refining and petrochemical markets were $9.2 million, up 49%. See supplemental data for a further breakdown of sales by market and region.

Compared with the prior year period, the 63% increase in gross profit and 440 basis point expansion of gross margin reflected higher margin projects, improved pricing, timing of material receipts and improving execution.

Selling, general and administrative expense (“SG&A”), inclusive of amortization, in the first quarter of fiscal 2024 was $7.3 million, or 15% of sales, up $1.5 million over the prior-year period. Approximately $0.9 million of the increase was attributable to higher performance-based compensation expense, including $0.8 million related to the supplemental performance bonus payout to Barber Nichols employees in connection with the 2021 acquisition.

Net income nearly tripled to $2.6 million, or $0.25 per diluted share. On a non-GAAP basis, adjusted net income* and net income per diluted share* were $3.6 million and $0.33, respectively, compared with $1.3 million and $0.12 during the same period a year ago.

Cash Management and Balance Sheet

Cash generated from operations in the first quarter was $8.6 million. Cash and cash equivalents on June 30, 2023, were $24.7 million up from $18.3 million on March 31, 2023. Capital expenditures for the first quarter of fiscal 2024 were $1.5 million.

Debt at quarter end was down $0.4 million to $11.3 million compared with March 31, 2023. As of June 30, 2023, the Company was in compliance with its lending agreement with a leverage ratio as calculated in accordance with the terms of the credit facility of 1.6x. At June 30, 2023, the amount available under the revolving credit facility was approximately $26 million to support organic growth initiatives.

Orders and Backlog 

Orders for the three-month period ended June 30, 2023, were up $27.6 million, or 69%, to $67.9 million compared with $40.3 million for the same period of fiscal 2023. Included in orders and backlog is the $13.5 million strategic investment from a major defense customer which the Company announced separately today. The purpose of the investment is to expand its Batavia production capabilities for complex defense components including delivering on $8.5 million follow on orders received from that customer.

Aftermarket orders for the refining and petrochemical markets were $7.9 million in the first quarter fiscal 2024, down from $10.1 million in the first quarter fiscal 2023 and lower than the $9.3 million in orders received in the fourth quarter of fiscal 2023.

Backlog for the quarter was $322.0 million, up 24% compared with the prior-year period and up 7% compared with the end of the trailing fourth quarter of fiscal 2023. Approximately 50% of orders currently in backlog are expected to be converted to sales in the next twelve months and another 25% to 30% is expected to convert to sales over the following year. The majority of orders expected to convert beyond twelve months are for the defense industry, specifically the U.S. Navy.

Christopher J. Thome, Vice President and Chief Financial Officer, noted, “The strategic investment we received from our defense customer is recorded in backlog and represents pre-payment on current and potential future orders. The cash investment will be used to expand our capabilities and positions us to meet our customer’s requirements and support the U.S. Navy’s shipbuilding schedule.”

Press release:

Graham Corporation (NYSE: GHM), a global business that designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries, today reported financial results for its fourth quarter and full fiscal year ended March 31(“fiscal 2021”).

The Company separately announced that today it has completed the acquisition of Barber-Nichols Inc. (“BNI”), a specialty turbomachinery designer and manufacturer for total consideration of $70 million, subject to customary working capital adjustments. 

James R. Lines, Graham’s president and chief executive officer, said, “Overall, we had a solid year, slightly exceeding our expectations as short cycle sales were stronger than expected in the quarter. As we look back at fiscal 2021, I believe that the results of our persistent efforts to diversify our business as we continue to focus on becoming a more significant defense industry supplier were apparent, with 25 percent of revenue generated by sales to the U.S. Navy.

"While orders still indicate a weak environment in our energy and petrochemical markets, our strong backlog reflects $69.2 million of U.S. Navy orders received in fiscal 2021. We now have $104 million of firm backlog related to the U.S. Navy. This strong backlog, combined with the acquisition of Barber-Nichols, significantly advances our diversification strategy into the defense industry.

"BNI will be immediately accretive to fiscal 2022 earnings and expand our top line by 50 percent. We are excited to welcome the BNI team to Graham and look forward to working together for continued growth.”

• Orders were for the year were $121.6 million including $69.2 million from the defense industry.
• Backlog at fiscal year-end was $137.6 million; 76 percent of backlog was for the defense industry.
• Graham furthers strategic diversification into defense industry with $70 million acquisition of Barber-Nichols Inc., a specialty turbomachinery company.

Click here to view the entire release, including financial statements.
Click here to view the teleconference slides.

To participate in today's Earnings teleconference call at 11 a.m. ET, dial (201) 689-8560.

Or click here to listen to the webcast.

Press release:

Graham Corporation (NYSE: GHM), a global business that designs, manufactures and sells critical equipment to the oil refining, petrochemical and defense industries, today announced that it has completed the acquisition of management-owned Barber-Nichols Inc. (“BNI”) for $70.1 million in a combination of 87 percent cash and 13 percent stock.

The Company also announced it has entered into new credit facilities including a 5-year term loan to finance a portion of the purchase price.

With $56 million in revenue and low-double digit EBITDA margins, BNI designs and manufactures specialty turbomachinery including highly specialized pumps, compressors and fans, and rocket engine turbopumps for critical applications, primarily in the defense and space industries.

Leading Supplier of Engineered Equipment to the Defense and Aerospace/Space Industries

• Barber-Nichols is a premier supplier of specialty turbomachinery, pumps and electronic drives that address critical applications for the defense and aerospace/space industries.
• Highly engineered products and solutions include advanced propulsion systems and integrated fluid, thermal and power generation systems for extreme environments.
• Acquisition accelerates Graham’s diversification strategy; more than 80 of combined backlog now in the defense industry.
• Proven track record of growth with multiyear visibility; current backlog of $100 million with approximately $40 million to convert into revenue in fiscal 2022.
• Provides a scalable platform for organic and acquisitive growth in the defense, aerospace, advanced power generation, cryogenic and energy storage markets.
• Expected to be immediately accretive to EPS, including shares issued for purchase.
• Daniel J. Thoren, formerly president and CEO of Barber-Nichols, appointed to Graham’s executive team as president and chief operating officer.
• Management to discuss the acquisition on today’s teleconference at 11 a.m. ET.

Click here to view the entire release.
Click here to view the slides for today's release.

Graham Corporation (NYSE: GHM), a global business that designs, manufactures and sells critical equipment for the oil refining, petrochemical and defense industries, announced Wednesday (May 26) that its Board of Directors declared a quarterly cash dividend of $0.11 per common share.

The dividend will be payable on June 23, 2021 to stockholders of record at the close of business on June 9, 2021.

Click here to view the entire release (pdf).

Press release:

Graham Corporation (NYSE: GHM), a global business that designs, manufactures and sells critical equipment for the oil refining, petrochemical and defense industries, announced today that it will release its financial results for the fourth quarter and full fiscal year 2021, before the opening of financial markets on Tuesday, June 1.

The Company will host a conference call and webcast to review its financial and operating results, strategy, and outlook. A question-and-answer session will follow.

Fourth Quarter and Full Fiscal Year 2021 Financial Results Conference Call

Tuesday, June 1
11 a.m. Eastern Time

Press release:

Graham Corporation(NYSE: GHM), a global business that designs, manufactures and sells critical equipment for the oil refining, petrochemical and defense industries, announced that its Board of Directors declared a quarterly cash dividend of $0.11 per common share.

The dividend will be payable on Nov. 24 to stockholders of record at the close of business on Nov. 10.
Click here to view the entire release.

Graham Corporation (NYSE: GHM), a global business that designs, manufactures and sells critical equipment for the oil refining, petrochemical and defense industries, announced today that it will release its financial results for the second quarter fiscal year 2021, before the opening of financial markets on Wednesday, Oct. 28.

The company will host a conference call and webcast to review its financial and operating results, strategy and outlook.  A question-and-answer session will follow.

Second Quarter Fiscal Year 2021 Financial Results Conference Call
   Wednesday, Oct. 28
   11 a.m. Eastern Time
   Phone: (201) 689-8560
   Internet webcast link and accompanying slide presentation:  www.graham-mfg.com

A telephonic replay will be available from 2 p.m. ET on the day of the teleconference through Wednesday, Nov. 4. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13710948, or access the webcast replay via the Company’s website at www.graham-mfg.com, where a transcript will also be posted once available.

Click here to view the entire release.

Batavia-based Graham Corporation (NYSE: GHM) announced Tuesday that due to the ongoing public health impact of the COVID-19 pandemic, and to support the health and well-being of its stockholders, directors, officers and employees, the format of the Annual Meeting of Stockholders (the "Annual Meeting") of the Company has been changed.

As previously announced, the Annual Meeting will be held at 11 a.m. on Tuesday, Aug. 11, Eastern Time, however the Company has made the decision that this year's Annual Meeting will now be held solely by remote communication, in a virtual-only format.

The Annual Meeting will not be held at a physical location, and stockholders will not be able to physically attend the Annual Meeting. This does not represent a change in the Company’s stockholder engagement philosophy, and the Company expects to resume in-person stockholder meetings next year. 

In order to attend the virtual Annual Meeting, stockholders of record as of the close of business on June 19, 2020 must sign-in via the internet at www.virtualshareholdermeeting.com/GHM2020.

To vote at the virtual Annual Meeting, stockholders will need their 16-digit control number included within their proxy card, notice of internet availability of proxy materials or voter instruction form.

Graham Corp. is a global business that designs, manufactures and sells critical equipment for the oil refining, petrochemical and defense industries.

Press release:

Batavia-based Graham Corp. -- a designer and manufacturer of critical equipment for the oil refining, petrochemical and power industries, including the supply of components and raw materials to nuclear energy facilities -- announced this week that it has been awarded $9.5 million in orders for nuclear energy facilities and an oil sands upgrader.

The two orders received from Westinghouse Electric Company were awarded to Graham’s wholly owned subsidiary Energy Steel, which will supply structural supports and assemblies for two nuclear power plant sites in the Southeastern United States where four AP1000^® pressurized water reactor units are under construction. The equipment is planned to be delivered throughout fiscal years 2013, 2014 and 2015.

The second order is for replacement parts for an ejector system originally supplied by Graham that is operating at an oil sands upgrader in Alberta, Canada. The parts are planned to be delivered in the first quarter of fiscal year 2013.

James R. Lines, Graham’s president and chief executive officer, commented, “We believe that our attention to detail, the high quality of our products, our engaged and responsive customer service and our demonstrated capability to execute complex orders were all critical in our selection as a Westinghouse AP1000 supplier. We consider the orders awarded to us over the last two quarters for the new nuclear energy facilities under construction in the Southeastern United States to be an affirmation both of our reputation for consistently delivering high quality products as well as our exceptional customer service.

“We believe our recent order activity is a solid indication that customers are becoming more likely to place orders. Bidding activity continues to be strong, and although we cannot predict when such activity will convert to orders, we have become more optimistic in the recovery of our markets.”