Graham Corporation · NYSE:GHM
Graham — Oppenheimer Emerging Growth Conference (February 2025)
26 slides from Graham's conference presentation, February 2025
Slide 1: Investor Presentation
Graham Corporation Investor Presentation February 2025 Daniel J. Thoren, Chief Executive Officer Matthew J. Malone, President and Chief Operating 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: Build Better Companies to Deliver Superior Performance
Critical Equipment Supplier for Defense, Space, Energy & Process Industries Our Mission: Build Better Companies to Deliver Superior Performance How We Do It: Our People Our Culture Our Structure Our Process Locations: Batavia, NY; Arvada, CO; Jupiter, FL; Products: Condensers, ejectors, heat Ahmedab
Slide 4: Steady Execution Drives Growth and Diversified Revenue Mix
Steady Execution Drives Growth and Diversified Revenue Mix Refining 15% FY 2021 Revenue: $97.5 Million Chem/Petrochem 12% Defense Other 9% 57% 22.2% Space 7% Defense 25% Other 9% Refining 41% Chem/Petrochem 25% TTM Q3 FY 2025 Revenue: $199.6 Million 4
Slide 5: 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 with
Slide 6: Leadership Transition
Leadership Transition Key Highlights Phase 1: February 5, 2025 • Strengthens leadership team to support future growth opportunities Matthew J. Malone Appointed as President & Chief Operating Officer Previously: VP & General Manager of Barber-Nichols • Appointments reflect ability to develop internal
Slide 7: 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 ~$1.2 to 6 Remaining Expected completion by FY2058 CVN Ford Class Carrier 24 Completed 2 per year ~$300
Slide 8: Proven Critical Supplier for U.S. Navy
Proven Critical Supplier for U.S. Navy • Long-term U.S. Navy contracts drive visibility and recurring Secured Contracts revenue • $13.5M investment from defense customer to expand capacity Strategic Investments • $2.1M BlueForge Alliance grant to expand welder training program and equipment Advantag
Slide 9: Further Revenue Diversification: Opportunities in Space
Further Revenue Diversification: Opportunities in Space Launch vehicle, satellite, and backpack applications Critical supplier with key commercial players in Space NASA contract for blowers and pumps for jet propulsion backpack Key solutions: fluid movement for launch vehicles including • Rocket eng
Slide 10: Driving New Energy Opportunities
Driving New Energy Opportunities While Leveraging Large Energy & Petrochemical Installed Base Developing “New Energy” opportunities: hydrogen; solar; small modular nuclear; geothermal with lithium extraction Leveraging installed base with improved lead management process; domestic aftermarket budget
Slide 11: Growth Businesses with Strategies for Expanding Margins
Growth Businesses with Strategies for Expanding Margins GHM Market Positioning Higher Space BN Defense Growth Index Target Market Growth Drivers: • Targeting growing end markets and applications New Energy • Increasing market share and market penetration • Innovative new products and solutions GM De
Slide 12: M&A Criteria for Core Growth Targets
M&A Criteria for Core Growth Targets Opportunistic acquisition strategy to supplement 8-10% annual organic growth expectations TARGET PROFILE PRODUCT/OPERATIONS & FINANCIALS Company Type: Product Alignment: U.S. based, privately held, independently operated Complementary to GHM turbomachinery, heat
Slide 13: Revenue Growth Across End Markets
Revenue Growth Across End Markets ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS Q3 FY25 sales up $3.2 million or 7.3% + 64% Chemical/Petrochemical $53.6 $49.1 $50.0 $47.0 + 30% Space $43.8 + 11% Defense + 2.4% Aftermarket - 16% Refining Q3 FY25 Revenue im
Slide 14: Strong Gross Profit and Margin Expansion
Strong Gross Profit and Margin Expansion ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS Q3 FY25 gross profit increased $2.0 million or 20% Margin expanded 260 bps to 24.8% $12.7 $12.4 $12.8 $11.7 $9.7 Q3 FY25 gross margin impacts + Volume + Favorable mix 2
Slide 15: Strengthened Earnings Power
Strengthened Earnings Power ($ 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) ADJUSTED NET INCOME PER DILUTED SHARE(1) Net Income per dilu
Slide 16: Financial Flexibility to Drive Strategic Initiatives
Financial Flexibility to Drive Strategic Initiatives ($ in millions) CAPITALIZATION No debt with strong cash flow December 31, March 31, $43 million available on revolving credit facility, taking 2024 2024 into account outstanding letters of credit Cash and cash equivalents $30.0 $16.9 CapEx of $7.3
Slide 17: Long-term Demand for Graham Diversified Portfolio
Long-term Demand for Graham Diversified Portfolio ($ in millions; narrative compared with prior-year period unless otherwise noted) Key Highlights TOTAL ORDERS(1) • YTD Book-to-Bill(1) of 1.0x $268.4 • As expected, Q3 orders were lower given strong performance in the $202.7 first half of fiscal 2025
Slide 18: Reiterating Guidance for Sales and Adjusted EBITDA; Raising FY2025 Gross Margins
Reiterating Guidance for Sales and Adjusted EBITDA(2) ; Raising FY2025 Gross Margins (as of February 7, 2025) Updated Fiscal 2025 Guidance Previous Guidance Net Sales $200 million to $210 million $200 million to $210 million Gross Margin 24% to 25% of sales 23% to 24% of sales SG&A expense (includin
Slide 19: For More Information
Graham Corporation For More Information: Christopher J. Thome Tom Cook Vice President - Finance and CFO ICR Phone: (585) 343-2216 (203) 919-8193 Graham@icrinc.com www.GrahamCorp.com
Slide 20: Supplemental Information
=6HM Supplemental Information
Slide 21: 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 22: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Three Months Ended Nine Months Ended December 31, December 31, 2024 2023 2024 2023 Net income $ 1,588 $ 165 $ 7,835 $ 3,216 Acquisition & integration (income) expense (220) 274 (900) 274 Debt amendment costs - 744 - 744 ERP Implementation costs 157 56 704 56 Net intere
Slide 23: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted Net Income and Adjusted Diluted EPS Reconciliation Three Months Ended Nine Months Ended December 31, December 31, 2024 2023 2024 2023 Net income $ 1,588 $ 165 $ 7,835 $ 3,216 Acquisition & integration (income) expense (220) 274 (900) 274 Amortization of intangible assets 554 596 1,663 1,487
Slide 24: Competition
Competition North American Market Competitors International Market Competitors Naval Nuclear Propulsion DC Fabricators; Joseph Oat; PCC; Edwards, Ltd.; Gardner Denver, Inc.; Program/Defense Triumph Aerospace; Xylem Refining vacuum distillation GEA Wiegand GmbH; Korting Hannover AG, Westlake Vacuum C
Slide 25: Representative List of Customers
Representative List of Customers Aerojet Rocketdyne China State-owned Refiners Jacobs Engineering Group Inc. Oak Ridge National Laboratory Air Liquide Cummins Kairos Power Raytheon Technologies Applied Research Laboratory at Pennsylvania State DuPont Koch Fertilizer ENID LLC Rolls-Royce North Americ
Slide 26: Investor Presentation
Graham Corporation Investor Presentation February 2025 Daniel J. Thoren, Chief Executive Officer Matthew J. Malone, President and Chief Operating Officer Christopher J. Thome, Vice President - Finance and Chief Financial Officer www.GrahamCorp.com
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