Graham Corporation · NYSE:GHM
Graham — Gabelli Funds 34th Annual Pump, Valve & Water Systems Symposium (February 2024)
22 slides from Graham's conference presentation, Feb 22, 2024
Slide 1: Gabelli Funds 34th Annual Pump, Valve & Water Systems Symposium
Graham Corporation Gabelli Funds 34th Annual Pump, Valve & Water Systems Symposium February 22, 2024 Daniel J. Thoren, President and Chief Executive Officer Matt Malone, Vice President and General Manager, Barber-Nichols www.GrahamCorp.com
Slide 2: Safe Harbor Statement
Safe Harbor Statement Safe Harbor Regarding Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are
Slide 3: Critical Equipment Supplier for Defense, Space, Energy & Process Industries
Critical Equipment Supplier for Defense, Space, Energy & Process Industries Our Mission: Build Better Companies to Deliver Superior Performance How We Do It: Our People Our Culture Our Structure Our Process Locations: Batavia, NY; Arvada, CO; Jupiter, FL; Products: Condensers, ejectors, heat Ahmedab
Slide 4: Building a Better Business: Plan Delivers Compounding Growth
Building a Better Business: Plan Delivers Compounding Growth Driving backlog growth and stronger margins Improving execution reduces costs and drives productivity Established strategic supplier to U.S. Navy with a variety of solutions Strong balance sheet and credit facility to support long-term gro
Slide 5: P3 Technologies: Adds differentiated propulsion, power, fluid flow technologies
P3 Technologies: Adds differentiated propulsion, power, fluid flow technologies Investment Highlights and Strategic Rationale Expect growth synergy opportunities by augmenting turbomachinery 1 technologies, engineering team and manufacturing capabilities Established 2017; Jupiter, FL Advances strate
Slide 6: Growth Potential of U.S. Navy Projects
Growth Potential of U.S. Navy Projects Build Timeline¹ GHM Future Build Plan¹ (based on current plan) Revenue Potential2 2 Completed 1 every 2 Under Construction $40M - $50M/Ship four years ~$400M ~$1.0 to 8 Remaining Expected completion by FY2055 CVN Ford Class Carrier 22 Completed 2 per year ~$300
Slide 7: Further Revenue Diversification: Opportunities in Space
Further Revenue Diversification: Opportunities in Space • Launch vehicle, satellite and backpack applications • Critical supplier with key commercial players in Space • NASA contract for blowers and pumps for jet propulsion backpack • Key solutions: fluid movement for launch vehicles including • roc
Slide 8: Driving New Energy Opportunities
Driving New Energy Opportunities While Leveraging Large Energy & Petrochem Installed Base • Developing “New Energy” opportunities: hydrogen; solar; small modular nuclear • Leveraging installed base with improved lead management process; Domestic aftermarket budgets returning after industry and pande
Slide 9: Growth Businesses with Strategies for Expanding Margins
Growth Businesses with Strategies for Expanding Margins GHM Market Positioning Higher Space BN Defense Growth Index Target Market Growth Drivers: • Targeting growing end markets and applications New Energy • Increasing market share and market penetration • Innovative new products and solutions GM De
Slide 10: Effectiveness of Strategy Reflected in Strong Q3 Results
Effectiveness of Strategy Reflected in Strong Q3 Results (All comparisons are with the same prior-year period) Revenue Gross Margin Record Orders(1) $43.8M +10% 22.2% +660 bps $123.3M • Defense projects • Favorable mix and better pricing • Reflects repeat orders for critical • Strong aftermarket sal
Slide 11: Increased Fiscal 2024 Revenue and Adjusted EBITDA Outlook
Increased Fiscal 2024 Revenue and Adjusted EBITDA Outlook(1) Revenue: $175 million to $185 million FY24 Guidance(1) • Implies ~15% revenue growth at midpoint of range Gross margin: ~20% • Implies ~9% adjusted EBITDA margin(3) at midpoint of range SG&A(2) (includes amortization): ~16% to 17% of sales
Slide 12: For More Information
Graham Corporation For More Information: Christopher J. Thome Deborah K. Pawlowski Vice President - Finance, CFO and CAO Kei Advisors LLC Phone: (585) 343-2216 Phone: (716) 843-3908 dpawlowski@keiadvisors.com www.GrahamCorp.com
Slide 13: Supplemental Information
=6HM Supplemental Information
Slide 14: Disclaimer Regarding Key Performance Metrics
Disclaimer Regarding Key Performance Metrics Key Performance Indicators In addition to the foregoing non-GAAP measures, management uses the following key performance metrics to analyze and measure the Company’s financial performance and results of operations: orders, backlog, and book-to-bill ratio.
Slide 15: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation TTM Q3 FY24 Year Ended March 31, Non-GAAP Financial Measure: 2023 2023 2022 2021 2020 (1) Adjusted EBITDA is defined as consolidated net Net income (loss) $ 2,736 $ 367 $ (8,773) $ 2,374 $ 1,872 income (loss) before net interest expense, income taxes, depreciation, amo
Slide 16: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted Net Income and Adjusted Diluted EPS Reconciliation TTM Q3 Year Ended March 31, Non-GAAP Financial Measure: FY 2024 2023 2022 2021 2020 (1) Applies a normalized tax rate to non-GAAP adjustments, which are pre-tax, based upon the statutory tax rate. Net income (loss) $ 2,736 $ 367 $ (8,773) $
Slide 17: Expected Energy / Petrochem Market Trends
Expected Energy / Petrochem Market Trends • Oil demand could peak in 2029, depends on scenario • India refinery capacity grows at 4% CAGR and doubles petrochemical capacity by 2025 • China E&C growth slowing • Petrochemical market setting up for next big buildout (5-year lead time) • Asian & Indian
Slide 18: Space & Defense Industry Markets Expected to Continue Growth
Space & Defense Industry Markets Expected to Continue Growth Space Thermal Management Systems - Defense 18
Slide 19: New Energy Markets Expected to Grow Significantly
New Energy Markets Expected to Grow Significantly Hydrogen Clean Energy Technologies 19
Slide 20: Competition
Competition North American Market Competitors International Market Competitors Naval Nuclear Propulsion DC Fabricators; Joseph Oat; PCC; Edwards, Ltd.; Gardner Denver, Inc.; Program/Defense Triumph Aerospace; Xylem Refining vacuum distillation GEA Wiegand GmbH; Korting Hannover AG, Westlake Vacuum C
Slide 21: Representative List of Customers
Representative List of Customers Aerojet Rocketdyne China State-owned Refiners Jacobs Engineering Group Inc. Northrop Grumman Air Liquide Cummins Kairos Power Oak Ridge National Laboratory Applied Research Laboratory at Pennsylvania State DuPont Koch Fertilizer ENID LLC Raytheon Technologies Univers
Slide 22: Gabelli Funds 34th Annual Pump, Valve & Water Systems Symposium
Graham Corporation Gabelli Funds 34th Annual Pump, Valve & Water Systems Symposium February 22, 2024 Daniel J. Thoren, President and Chief Executive Officer Matt Malone, Vice President and General Manager, Barber-Nichols www.GrahamCorp.com
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