Graham Corporation · NYSE:GHM
Graham — Q2 2024 Earnings Presentation
16 slides from Graham's earnings presentation, Nov 6, 2023
Slide 1: Second Quarter FY2024 Teleconference
Graham Corporation Second Quarter FY2024 Teleconference November 6, 2023 Daniel J. Thoren, President and Chief Executive Officer Christopher J. Thome, Vice President - Finance and Chief Financial Officer 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: Second Quarter FY24 Highlights
Second Quarter FY24 Highlights Healthier, more robust business • Making great progress • Executing better Shipped last first article units Market Strength Supports Outlook • Strong defense shipments and backlog • Strong aftermarket for commercial business (refining and petrochem) New credit agreemen
Slide 4: Effectiveness of Strategy Reflected in Strong Results
Demonstrating Solid Progress with Strategy for Growth (All comparisons are with the same prior-year period) Effectiveness of Strategy Reflected in Strong Results Net income per diluted share/ Revenue Adjusted Net income per diluted share(1) Orders(2) $45.1M +18% $0.04/$0.13 $36.5M ➢ Growth driven by
Slide 5: Delivering to Plan
Delivering to Plan ($ in millions) SALES GROSS PROFIT $47.6 $45.1 $11.0 $43.0 $39.9 $38.1 $7.2 $7.2 $6.2 $5.3 13.8% 15.6% 16.6% 23.1% 16.0% Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Sales increased $6.9 million, or 18% y/y Gross profit increased $1.9 million, or
Slide 6: Driving Earnings Power
Driving Earnings Power ($ in millions, except per share data) NET INCOME PER DILUTED SHARE AND ADJUSTED EBITDA AND MARGIN(1) ADJUSTED NET INCOME PER DILUTED SHARE(1) Net Income per diluted share Adjusted Net Income per diluted share $5.6 $0.33 $0.25 $2.7 $0.13 $2.2 $0.08 $0.03 $0.03 $0.04 $1.5 $0.00
Slide 7: Cash Management & Balance Sheet
Cash Management & Balance Sheet ($ in millions) Cash up $7.5 million over end of FY 2023 CAPITALIZATION Reduced debt by $0.9 million compared with FY23 year-end September 30, March 31, 2023 2023 • Q2 bank debt leverage ratio down to 1.3x(2) Cash and cash equivalents $25.8 $18.3 • As of November 6, 2
Slide 8: Proven Strategic Supplier for U.S. Navy
Proven Strategic Supplier for U.S. Navy ($ in millions) QUARTERLY ORDER (1) TREND Q2 ORDERS (1) : $36.5 MILLION $91.5 $67.9 Space $50.8 8% Refining 11% $33.0 $36.5 $69.6 $20.0 $28.0 $20.8 Chem/ $7.8 Petrochem $21.9 $12.2 $22.8 $34.9 $15.6 12% Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Defense 57% Other
Slide 9: Long Term Backlog Provides Visibility and Stability
Long Term Backlog Provides Visibility and Stability ($ in millions) TOTAL BACKLOG(1) Q2 FY24 : BY INDUSTRY $313.3 $322.0 $313.3 Space 2% $293.7 $301.7 Other 4% Chem/ Petrochem 4% Defense 80% Refining 9% $248.7 $253.4 $250.7 $234.5 $243.6 • Q2 backlog flat year-over-year • ~50% of backlog expected to
Slide 10: Maintaining Fiscal 2024 Outlook; On Track to Achieve FY27 Goals
Maintaining Fiscal 2024 Outlook(1) ; On Track to Achieve FY27 Goals FY27 Strategic Goals: • >$200 million in revenue Revenue: $170 million to $180 million • Represents ~8% to 10% annualized growth per year • Low to mid-teen adjusted EBITDA margin(3) Gross margin: ~18% to 19% FY24 Guidance(1) • Impli
Slide 11: Building a Better Business: Plan Delivers Compounding Growth
Building a Better Business: Plan Delivers Compounding Growth Growing backlog with stronger margins Winning new business with better pricing Improving execution reduces costs and drives productivity Established strategic supplier to U.S. Navy with a variety of solutions Focused on growth both organic
Slide 12: Supplemental Information
=G6HM SUPPLEMENTAL INFORMATION
Slide 13: 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 14: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Three Months Ended Six Months Ended September 30, September 30, 2023 2022 2023 2022 Net income (loss) $ 411 $ (196) $ 3,051 $ 480 Acquisition & integration costs - - - 54 Barber-Nichols performance bonus 802 - 1,569 - Debt amendment costs - 41 - 194 Net interest expens
Slide 15: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted Net Income and Adjusted Diluted EPS Reconciliation Three Months Ended Six Months Ended September 30, September 30, 2023 2022 2023 2022 Net income (loss) $ 411 $ (196) $ 3,051 $ 480 Acquisition & integration costs - - - 54 Amortization of intangible assets 445 619 891 1,238 Barber-Nichols pe
Slide 16: Second Quarter FY2024 Teleconference
Graham Corporation Second Quarter FY2024 Teleconference November 6, 2023 Daniel J. Thoren, President and Chief Executive Officer Christopher J. Thome, Vice President - Finance and Chief Financial Officer www.GrahamCorp.com