Slide 1: Second Quarter FY25 Teleconference
Graham Corporation Second Quarter FY25 Teleconference November 8, 2024 Daniel J. Thoren, President and Chief Executive Officer Matthew Malone, Vice President and General Manager - Barber-Nichols 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: Exceptional Execution Throughout our Business
Exceptional Execution Throughout our Business (All comparisons are to prior fiscal year) Record Quarterly Revenue Gross Margin Net Income $53.6M +19% 23.9% +790 bps $3.3M +698% • Strength across markets • Leverage on higher volume • EPS $0.30, up 650% • Defense up 23% • Favorable mix • Adjusted net
Slide 4: Strategic Land Acquisition to Enable Future Growth and Expansion
Strategic Land Acquisition to Enable Future Growth and Expansion Addressing Land Constraints: Acquired new plot of land to overcome space limitations Strategic Purchase: Opportunistic investment of $1.4M to support New long-term growth initiatives Land Plot Planned Expansion: Facility construction e
Slide 5: Planning Advanced Cryogenic Propellant Testing Facility
Planning Advanced Cryogenic Propellant Testing Facility Enhanced Capabilities: • In-house product validation for quality assurance (support testing pumps, components, fluid management systems, and combustion devices) • Entry into new, high-demand markets with scalable testing solutions • Early feasi
Slide 6: Record Revenue
Record Revenue ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS Q2 FY25 sales up $8.5 million or 19% + 24% Chemical/Petrochemical $53.6 $49.1 $50.0 + 23% Defense $45.1 $43.8 + 23% Space + 15% Refining - 14% Aftermarket Q2 FY25 Revenue impacts Q2 FY24 Q3 FY24
Slide 7: Strong Gross Profit and Margin Expansion
Strong Gross Profit and Margin Expansion ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS Q2 FY25 gross profit increased $5.6 million or 78% Margin expanded 790 bps to 23.9% $12.7 $12.4 $12.8 $9.7 Q2 FY25 gross margin impacts $7.2 + $0.4 million, or ~80 bps,
Slide 8: Strengthened Earnings Power
Strengthened Earnings Power ($ in millions; except per share data; narrative compared with prior-year period unless otherwise noted) NET INCOME PER DILUTED SHARE AND NET INCOME PER DILUTED SHARE AND ADJUSTED NET INCOME PER DILUTED SHARE(1) - QUARTERS ADJUSTED NET INCOME PER DILUTED SHARE(1) - YEARS
Slide 9: Strategic Execution Yields Stronger Adjusted EBITDA and Margin
Strategic Execution Yields Stronger Adjusted EBITDA and Margin(1) ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS Q2 FY25 Adjusted EBITDA increased $3.4 million or 150% • Margin expanded 550 bps to 10.5% $5.6 $5.1 Quarterly SG&A, inclusive of amortization,
Slide 10: Financial Flexibility to Drive Strategic Initiatives
Financial Flexibility to Drive Strategic Initiatives ($ in millions) CAPITALIZATION No debt with strong free cash flow September 30, March 31, $43 million available on revolving credit facility, taking 2024 2024 into account outstanding letters of credit Cash and cash equivalents $32.3 $16.9 CapEx o
Slide 11: Strong Order Growth from Defense, Space & Refining
Strong Order(1) Growth from Defense, Space & Refining ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS Q2 ORDERS (1) BY INDUSTRY $123.3 $20.1 Space $63.7 21% $55.8 $36.5 $103.2 $40.8 $27.2 $33.2 Defense $15.7 $20.4 48% $28.6 $30.5 Refining $20.8 $20.4 17% Q2
Slide 12: Record Backlog of $407 Million Provides Stability and Clear Growth Path
Record Backlog(1) of $407 Million Provides Stability and Clear Growth Path ($ in millions; narrative compared with prior-year period unless otherwise noted) TOTAL BACKLOG(1) Q2 BACKLOG(1) : BY INDUSTRY $399.2 $396.8 $407.0 $390.9 $64.7 $69.0 $79.6 $62.5 Refining 8% $313.3 Defense 80% Chem/ Petrochem
Slide 13: Raised Guidance for Gross Margin and Adjusted EBITDA to Reflect Improved Profitability
Raised Guidance for Gross Margin and Adjusted EBITDA(2) to Reflect Improved Profitability (as of November 8, 2024) Updated Fiscal 2025 Guidance Previous Guidance Net Sales $200 million to $210 million $200 million to $210 million Gross Margin 23% to 24% of sales 22% to 23% of sales SG&A expense (inc
Slide 14: Advancing Toward Long-Term Goals with Strategic Actions
Advancing Toward Long-Term Goals with Strategic Actions Engaging with customers to develop full life-cycle mission critical product opportunities Operational Excellence to drive competitive positioning Expanded capital and R&D programs to support growth initiatives; targeted ROIC >20% Engaging stake
Slide 15: Supplemental Information
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Slide 16: Key Performance Metrics
Key Performance Metrics Key Performance Indicators In addition to the foregoing non-GAAP measures, management uses the following key performance metrics to analyze and measure the Company’s financial performance and results of operations: orders, backlog, and book-to-bill ratio. Management uses orde
Slide 17: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ADJUSTED EBITDA Quarters Years ($ in tousands except per share data) Q2 Q3 Q4 Q1 Q2 YTD YTD TTM 2024 2024 2024 2025 2025 2023 2024 Q2 FY25 Net income $ 411 $ 165 $ 1,340 $ 2,966 $ 3,281 $ 367 $ 4,556 $ 7,752 Acquisition & integration costs (income) - 274 158 (93) (587)
Slide 18: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted Net Income and Adjusted Diluted EPS Reconciliation ADJUSTED NET INCOME Quarters Years ($ in tousands except per share data) Q2 Q3 Q4 Q1 Q2 YTD YTD TTM 2024 2024 2024 2025 2025 2023 2024 Q2 FY25 Net income $ 411 $ 165 $ 1,340 $ 2,966 $ 3,281 $ 367 $ 4,556 $ 7,752 Acquisition & integration co
Slide 19: Second Quarter FY25 Teleconference
Graham Corporation Second Quarter FY25 Teleconference November 8, 2024 Daniel J. Thoren, President and Chief Executive Officer Matthew Malone, Vice President and General Manager - Barber-Nichols Christopher J. Thome, Vice President - Finance and Chief Financial Officer www.GrahamCorp.com