Slide 1: Q4 FY2023 Teleconference
Graham Corporation Q4 FY2023 Teleconference June 8, 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: FY23 Sales Grew 28% to Record $157.1 Million
Executing Plan and Raising Revenue and Margin Goals for 2027 (All comparisons are with the same prior-year period) FY23 Sales Grew 28% to Record $157.1 Million Revenue Diluted EPS/ Adjusted Dil. EPS(1) Record Orders $157.1M +28% $0.03/$0.24 $202.7M +41% Successfully stabilized vacuum/heat transfer b
Slide 4: Demonstrating Steady Progress
Demonstrating Steady Progress ($ in millions) SALES GROSS MARGIN $43.0 $39.7 $39.9 $38.1 $36.1 $6.7 $7.2 $6.2 $5.3 $4.2 10.6% 18.7% 13.8% 15.6% 16.6% Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Sales increased $3.3 million, or 8%, y/y Margin expansion with stronge
Slide 5: Achieved Expectations for the Year
Achieved Expectations for the Year ($ in millions, except per share data) ADJUSTED EBITDA AND MARGIN(1) DILUTED EPS AND ADJUSTED DILUTED EPS(1) Diluted EPS Adjusted Diluted EPS $0.12 $2.7 $0.08 $0.06 $2.2 $0.03 $0.03 $1.5 $0.00 $1.2 ($0.02) 6.7% ($0.02) $0.4 ($0.05) 1.0% 7.6% 4.0% 5.6% 2.9% Q4 FY22
Slide 6: FY23: 28% Revenue Growth and Strong Profitability Improvement
FY23: 28% Revenue Growth and Strong Profitability Improvement ($ in millions, except per share data) Sales Adjusted EBITDA and Margin (1) $157.1 $7.7 $122.8 4.9% FY 2022 FY 2023 (4.1%) $(5.0) FY 2022 FY 2023 Sales growth validates market diversity + Revenue up in all markets; included $8.9 million o
Slide 7: Cash Management & Balance Sheet
Cash Management & Balance Sheet ($ in millions) CAPITALIZATION Cash up $1.0 million over trailing quarter March 31, December 31, March 31, 2023 2022 2022 Reduced debt by $6.6 million in FY23 Cash and cash equivalents $18.3 $17.2 $14.7 • Bank leverage ratio down to 2.1x debt to adjusted Total debt 11
Slide 8: Record Orders in FY 2023
Record Orders in FY 2023 ($ in millions) ORDERS(1) FY 2023 ORDERS : $202.7 MILLION $91.5 Refining 14% Other 13% Space 7% $50.8 Chem/Petrochem Defense $40.3 8% 58% $11.3 $23.7 $69.6 $28.0 $2.9 $20.0 $7.8 FY23 Book to Bill(1) of 1.3x $20.8 $29.0 $21.9 $12.2 $22.8 ▪ Orders increased 41% in FY23 over pr
Slide 9: Good Visibility with Strong Defense Backlog
Good Visibility with Strong Defense Backlog ($ in millions) TOTAL BACKLOG(1) Q4 FY23 : BY INDUSTRY $313.3 Chem/ Petrochem 3% $293.7 $301.7 Space 3% $256.5 $260.7 Refining Defense 9% 81% $193.2 $248.7 $194.8 $234.5 $243.6 ▪ Strong defense backlog provides long-term visibility ▪ Q4 FY23 backlog up 18%
Slide 10: Fiscal 2024 Outlook and New Goals for FY27
Fiscal 2024 Outlook(1) and New Goals for FY27 FY27 Strategic Goals: Revenue: $165 million to $175 million • >$200 million in revenue • Low to mid-teen adj. EBITDA margin Gross margin: ~17% to 18% FY24 Guidance • Implies ~8% revenue growth at midpoint of range SG&A: ~15% to 16% of sales • Implies ~7%
Slide 11: 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 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 Year Ended March 31, March 31, (Unaudited, $ in thousands) 2023 2022 2023 2022 Net income (loss) $ (481) $ (1,425) $ 367 $ (8,773) Acquisition related inventory step-up expense - 27 - 95 Acquisition & integration costs - 189 54 562 Change in fair val
Slide 15: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted Net Income and Adjusted Diluted EPS Reconciliation Three Months Ended Year Ended March 31, March 31, (Unaudited, $ in thousands) 2023 2022 2023 2022 Net income (loss) $ (481) $ (1,425) $ 367 $ (8,773) Acquisition related inventory step-up expense - 27 - 95 Acquisition & integration costs -
Slide 16: Orders History and Trend
Orders History and Trend ($ in millions) FY23 QUARTERLY ORDER TREND FIVE-YEAR ORDER TREND $202.7 $143.9 $121.6 $91.5 $101.2 $7.2 $116.7 $80.0 $63.2 $8.6 $50.8 $40.3 $69.2 $11.3 $28.0 $69.6 $20.0 $7.8 $29.0 $21.9 $12.2 $22.8 $94.0 $71.4 $52.4 $80.7 $86.0 Q1 Q2 Q3 Q4 FY19 FY20 FY21 FY22 FY23 Net Order
Slide 17: 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 ~$1.0 - 8 Remaining Expected completion by FY2055 CVN Ford Class Carrier 22 Completed 2 per year ~$300M