Slide 1: Q1 FY2024 Teleconference
Graham Corporation Q1 FY2024 Teleconference August 7, 2023 (slide 8 corrected and revised) 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: Q1 Sales Grew 32% to Record $47.6 Million
Record Quarterly Revenue, Record Backlog (All comparisons are with the same prior-year period) Q1 Sales Grew 32% to Record $47.6 Million Revenue Diluted EPS/ Adjusted Dil. EPS(1) Orders(2) $47.6M +32% $0.25/$0.33 $67.9M +69% Growth driven by defense market more than doubling • Sales to defense marke
Slide 4: Demonstrating Steady Progress
Demonstrating Steady Progress ($ in millions) SALES GROSS MARGIN $47.6 $11.0 $43.0 $39.9 $38.1 $36.1 $7.2 $6.7 $6.2 $5.3 18.7% 13.8% 15.6% 16.6% 23.1% Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Sales increased $11.5 million, or 32%, y/y Margin expansion with stro
Slide 5: Solid Execution Drives Earnings Power
Solid Execution Drives Earnings Power ($ in millions, except per share data) ADJUSTED EBITDA AND MARGIN(1) DILUTED EPS AND ADJUSTED DILUTED EPS(1) Diluted EPS Adjusted Diluted EPS $5.6 $0.33 $0.25 $2.7 $2.2 $0.12 $1.5 $0.06 $0.08 $1.2 6.7% $0.03 $0.03 $0.00 7.6% 4.0% 5.6% 2.9% 11.8% ($0.02) ($0.05)
Slide 6: Cash Management & Balance Sheet
Cash Management & Balance Sheet ($ in millions) CAPITALIZATION Cash up $6.4 million over trailing quarter June 30, March 31, Reduced debt by $400 thousand 2023 2023 • Bank leverage ratio down to 1.6x debt to adjusted EBITDA(2) Cash and cash equivalents $24.7 $18.3 Total debt 11.3 11.7 Measurably imp
Slide 7: Orders up 69% year-over-year
Orders up 69% year-over-year ($ in millions) ORDERS(1) Q1 ORDERS : $67.9 MILLION $91.5 Space Other 7% 7% $67.9 Chem/ Petrochem 16% Defense $50.8 49% Refining $40.3 21% $33.0 $11.3 $69.6 $28.0 $20.0 $7.8 Q1 Book to Bill(1) of 1.4x • Orders increased 69% in Q1 over prior year period and 34% $29.0 $21.
Slide 8: Good Visibility with Strong Defense Backlog
Good Visibility with Strong Defense Backlog ($ in millions) TOTAL BACKLOG(1) Q1 FY24 : BY INDUSTRY $313.3 $322.0 $293.7 $301.7 Other 4% $260.7 Space 3% Defense Chem/ Petrochem 4% 79% Refining 10% $193.2 $248.7 $253.4 $234.5 $243.6 • Strong defense backlog includes strategic investment from major def
Slide 9: Increased Fiscal 2024 Outlook; On Track to Achieve FY27 Goals
Increased Fiscal 2024 Outlook(1) ; On Track to Achieve FY27 Goals FY27 Strategic Goals: • >$200 million in revenue Revenue: $170 million to $180 million • Low to mid-teen adj. EBITDA margin FY24 Guidance Gross margin: ~18% to 19% • Implies ~11% revenue growth at midpoint of range SG&A (includes amor
Slide 10: Strategy Evolving to Drive Steady Growth and Stronger Profitability
Strategy Evolving to Drive Steady Growth and Stronger Profitability • Focused on markets where product and technology Targeted Markets differentiation matters: critical equipment for critical applications Operational • Invest in process optimization including digital & automated tools Excellence Eli
Slide 11: Supplemental Information
3GHM SUPPLEMENTAL INFORMATION
Slide 12: 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 13: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Three Months Ended June 30, 2023 2022 Net income $ 2,640 $ 676 Acquisition & integration costs - 54 Barber-Nichols performance bonus 767 - Debt amendment costs - 153 Net interest expense (income) 185 157 Income taxes 766 215 Depreciation & amortization 1,239 1,475 Adju
Slide 14: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted Net Income and Adjusted Diluted EPS Reconciliation Three Months Ended June 30, 2023 2022 Net income $ 2,640 $ 676 Acquisition & integration costs - 54 Amortization of intangible assets 446 619 Barber-Nichols performance bonus 767 - Debt amendment costs - 153 Normalized tax rate(1) (279) (17
Slide 15: Orders History and Trend
Orders History and Trend ($ in millions) QUARTERLY ORDER TREND YEARLY ORDER TREND $230.3 $91.5 $202.7 $67.9 $143.9 $50.8 $121.6 $40.3 $138.3 $33.0 $80.0 $116.7 $63.2 $11.3 $8.6 $69.6 $28.0 $69.2 $20.0 $7.8 $29.0 $21.9 $12.2 $22.8 $34.9 $71.4 $52.4 $80.7 $86.0 $92.0 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1
Slide 16: 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 CVN Ford Class Carrier 8 Remaining Expected completion by FY2055 ~$1.0 - 22 Completed 2 per year ~$300M
Slide 17: Q1 FY2024 Teleconference
Graham Corporation Q1 FY2024 Teleconference August 7, 2023 Daniel J. Thoren, President and Chief Executive Officer Christopher J. Thome, Vice President - Finance and Chief Financial Officer www.GrahamCorp.com