Graham Corporation · NYSE:GHM
Graham — Corporate Update (March 2020)
12 slides from Graham's corporate update, Mar 25, 2020
Slide 1: Business Update
Business Update James R. Lines President & Chief Executive Officer Jeffrey F. Glajch Vice President & Chief Financial Officer NYSE: GHM • March 25, 2020
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: Agenda
Agenda Jim Lines Core values End market dynamics Supply Chain Backlog Outlook Jeff Glajch Balance sheet strength Actions taken Next steps
Slide 4: Graham Core Values
Graham Core Values Customers Stand at the ready Don’t diminish support in downcycle Be better than competitors Be accommodative where possible Shift opportunity and price management processes Employees Hold on to our talent Narrow focus Work on right activities Change hiring plans Keep capacity and
Slide 5: Current Business Environment – End Markets
Current Business Environment – End Markets Refining – varies by region and type of end user Bidding activity continues for several large projects in China, India, other areas in Asia Cash flow from upstream tied to oil price is weakening, integrated oil companies expected to slow order pace Too earl
Slide 6: Current Business Environment – Supply Chain
Current Business Environment – Supply Chain Largely regional for Graham Most suppliers are domestic, to support Batavia operations Global subcontractors are regional, in support of regional projects China supply chain primarily used for China end market Diversified, several sources for key component
Slide 7: Assessment of Backlog
Assessment of Backlog Large and solid backlog at 12/31/19: $122.9 million Navy more than half, 52% During Q4 FY20, two refining orders canceled, $3.5 million, unrelated to coronavirus pandemic During Q4 FY20, two chem/petchem projects added, $3 million each Short cycle orders off ~25% vs last year B
Slide 8: Outlook – Uncertain
Outlook – Uncertain Fiscal 2020 Rescinding guidance announced on January 29, 2020 Fiscal 2021 Extent of remobilization following shutdown may be impacted if shutdown gets extended Delaying finalization of budget due to significant uncertainty Once business is back up and running, anticipate subseque
Slide 9: Significant Liquidity Provides Strength During Unprecedented Times
Significant Liquidity Provides Strength During Unprecedented Times $72 million of cash at 12/31/19 $25 million of borrowing capacity, plus additional $25 million accordion in debt agreement Virtually no bank debt outstanding Board of Directors plans to maintain quarterly cash dividend Retain current
Slide 10: Graham's Temporary Actions Taken to Adapt and Thrive
Graham’s Temporary Actions Taken to Adapt and Thrive Protecting our workforce Two-week facility shutdown through April 5, 2020 In advance of shutdown: Business travel stopped Requiring self-isolation following certain personal travel Restricting visitors Office employees work remotely Social distanc
Slide 11: Next Steps
Next Steps Plan to provide another interim investor update if situation changes Continue to maintain contact with customers, EPCs, suppliers Office staff working remotely Keep employees informed of changes Board intends to maintain quarterly cash dividend Current timing for Q4 FY20 is May 29, 2020
Slide 12: Business Update
Business Update NYSE: GHM • March 25, 2020