Graham Corporation · NYSE:GHM
Graham — Q3 FY2011 Earnings Presentation
16 slides from Graham's earnings presentation, Feb 4, 2011
Slide 1: Supplemental Slides Third Quarter Fiscal 2011 Earnings Call
SUPPLEMENTAL SLIDES THIRD QUARTER FISCAL 2011 EARNINGS CALL PUTTING OUR BRAND TO WORK 1 NYSE Amex: GHM 1
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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 subject to risks, uncertainties and assumptions
Slide 3: Jim Lines, President and Chief Executive Officer
JIM LINES PRESIDENT AND CHIEF EXECUTIVE OFFICER PUTTING OUR BRAND TO WORK NYSE Amex: GHM
Slide 4: Highlights of 3Q FY2011
HIGHLIGHTS OF 3Q FY2011 Orders: Driven by international markets Refinery pipeline solid H d b i t Hydrocarbon processing opportunities Canadian oil sands Sales: Sequential and comparable period growth Margins: In line with expectations Energy Steel Acquisition: Excellent strategic fit 4 Graham Corpo
Slide 5: Expanding Revenue
EXPANDING REVENUE Sales by Region Q3 FY11 YTD Revenue: $48.3 million 12-$86.4 $101.1 U.S. Middle East 14% Asia 12 Month Revenue ($ in millions) $55.2 $65.8 $62.2 $69 - $72 Est.* 41% s a 26% Other 19% International sales at 64% of total Sales by Market $48.3 Q3FY11 YTD FY2006 FY2007 FY2008 FY2009 FY2
Slide 6: Energy Steel Acquisition
ENERGY STEEL ACQUISITION Great progress on integp g gration Acquisition costs expensed: $0.05/share impact to Q3 2011 net income Opportunities: Increase market penetration with existing nuclear power plants Integrate engineering and design expertise with certified manufacturing process New power pla
Slide 7: Strategic Actions to Drive Growth
STRATEGIC ACTIONS TO DRIVE GROWTH Expand market opportunities: larger addressable market Naval Nuclear Propulsion Program (NNPP) Nuclear Power Energy Steel acquisition Undergoing certification process for Batavia Operations Renewable energy Broaden subcontractor network: greater flexibility, shorter
Slide 8: Jeff Glajch, Vice President and Chief Financial Officer
JEFF GLAJCH VICE PRESIDENT AND CHIEF FINANCIAL OFFICER PUTTING OUR BRAND TO WORK NYSE Amex: GHM
Slide 9: International Sales Driving Recovery
INTERNATIONAL SALES DRIVING RECOVERY $24.7 $24.8 Quarterly Revenue $19.2 million 3Q FY2011 Revenue $20.1 $19.2* International 64% $16.1 $12.2 $13.8 $13.4 $15.7 U.S. 36% Emerging economies driving next cycle: Asia (China), Middle East, South America Sales rebounded after four-quarter trough Graham Co
Slide 10: Recovering Order Trend and Strong Backlog
RECOVERING ORDER TREND AND STRONG BACKLOG Backlog (In millions) $51.6* Quarterly Orders $89.8 $94.3 $89.1 $83.3 $90.5** $8.1 $20.5 $8.8 $29.6 $18.3 $8 1$10.5 $17.8** (In millions) $52.5 $48.3 $37.0 $50.5 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY11 Q2 FY11 Q3 FY11 8.1 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 11: Operational Review: Q3 FY2011
OPERATIONAL REVIEW: Q3 FY2011 37.9% 38.8% 41.1% 36.3% 31 4% 31 1% 34.0% SG&A Gross Margin 31.4% 31.1% millions) 28.8% 25.3% $3.6 $3.5 $3.2 $ 3.0 $3.1 $3 0 ($ in Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY11 Q2 FY11 Q3 FY11* $2.7 $2.6 3.0 $2.9 FY11 23.5% 22.4% 25.0% Operating Margin 16.9% 9
Slide 12: Financial Review: Outlook
FINANCIAL REVIEW: OUTLOOK 40% 41% Gross Margin SG&A (In millions) $13 1 $14.8 $12.4 - $12 8 Est * 29% 26% 36% 28%-30% 29% Est.* $10.5 $10.8 13.1 $12.1 $8.5* 12.8 Est.* Estimates based on full year fiscal 2011 guidance of revenue between $69 and $72 million and gross margin between 28% and 30% Margin
Slide 13: Raised the Floor on Margins
RAISED THE FLOOR ON MARGINS $110 Previous Cycle: FY1993 to 2000* Current Cycle: FY2005 to Present $86.4 $101.1 $ $95 ($ in millions) FY98 to FY00: 33% decline in revenue FY09 to FY10: 39% decline in revenue $55.2 $65.8 $62.2 $62.1 $51.8 $48 9 $65 80 $40.3 $41.0 $41.3 $46.4 $46.8 48.9 $34.9 $35 $50 F
Slide 14: Strong Cash Position
STRONG CASH POSITION $74.6 Cash and Cash Equivalents No bank debt at $70.8 $48 2 ($ in millions) 12/31/10 Energy Steel: all cash $18 million acquisition $36.8 $46.2 48.2 3/31/08 3/31/09 3/31/10 9/30/10 12/31/10 Graham Corporation 2011 14 * Includes large customer deposits: ~ $14 - $16 million at 3/3
Slide 15: Supplemental Slides Third Quarter Fiscal 2011 Earnings Call
SUPPLEMENTAL SLIDES THIRD QUARTER FISCAL 2011 EARNINGS CALL PUTTING OUR BRAND TO WORK 15 NYSE Amex: GHM 15
Slide 16: EBITDA Reconciliation
EBITDA RECONCILIATION Current Cycle 2005 2006 2007 2008 2009 2010 Q3FY11 TTM GAAP operating profit $ (206) $ 5,454 $ 6,013 $ 21,088 $ 26,328 $ 10,042 $ 6,074 Depreciation & amortization 780 793 887 989 1,111 1,797 1,640 EBITDA $ 574 $ 6,247 $ 6,900 $ 22,077 $ 2 7,439 $ 11,839 $ 7,714 Previous Cycle