Graham Corporation · NYSE:GHM
Graham — Northland Growth Virtual Conference (June 2024)
27 slides from Graham's conference presentation, Jun 25, 2024
Slide 1: Northland Growth Virtual Conference
Graham Corporation Northland Growth Virtual Conference June 25, 2024 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: 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 16% FY 2021 Revenue: $97.5 Million Chem/Petrochem Defense 11% 54% Other 9% 22.2% Space 7% Defense 25% Other 12% Refining 41% Chem/Petrochem 25% FY 2024 Revenue: $185.5 Million 4
Slide 5: Strategic Initiatives Furthering Progress Toward Long-term Goals
Strategic Initiatives Furthering Progress Toward Long-term Goals Engaging with customers to develop full life-cycle mission critical product opportunities Operational Excellence to drive competitive positioning Expanded capital program with ROIC to support growth initiatives Engaging stakeholders to
Slide 6: 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 • Secured $13.5 million strategic investment from defense Strategic Investment customer in support of the Naval Nuclear Propulsion Program Advantage over • Sole supplier wi
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 ~$1.0 to 8 Remaining Expected completion by FY2055 CVN Ford Class Carrier 22 Completed 2 per year ~$300
Slide 8: 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 • roc
Slide 9: P3 Technologies: Adds differentiated propulsion, power, fluid flow technologies
P3 Technologies: Adds differentiated propulsion, power, fluid flow technologies Investment Highlights and Strategic Rationale Expect growth synergy opportunities by augmenting turbomachinery 1 technologies, engineering team and manufacturing capabilities Established 2017; Jupiter, FL Advances strate
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 bu
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: Record Revenue
Record Revenue Q4 record sales up $6.0 million or 14% ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS + 43% defense + 37% Refining $47.6 $49.1 22% Aftermarket $45.1 $43.8 + $43.0 + 0% Chemical/petrochem - 60% Space Record yearly sales up $28.4 million or 18
Slide 13: Strong Gross Profit and Margin Expansion
Strong Gross Profit and Margin Expansion ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS Q4 gross profit increased $5.5 million or 77% Margin expanded 930 bps to 25.9% $12.7 $11.0 $9.7 Yearly gross profit increased $15.2 million or 60% $7.2 $7.2 Margin expa
Slide 14: Strengthened Margins Drove Measurably Improved EPS
Strengthened Margins Drove Measurably Improved EPS ($ in millions; except per share date; narrative compared with prior-year period unless otherwise noted) NET INCOME (LOSS) PER DILUTED SHARE AND NET INCOME (LOSS) PER DILUTED SHARE AND ADJUSTED NET INCOME PER DILUTED SHARE(1) -QUARTERS ADJUSTED NET
Slide 15: Improved Adjusted EBITDA and Margin
Improved Adjusted EBITDA and Margin(1) ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS Q4 Adj. EBITDA increased $1.5 million or 103% Margin expanded 260 bps to 6.0% $5.1 FY24 Adj. EBITDA increased $4.7 million or 56% $3.0 $3.0 Margin expanded 180 bps to 7.2
Slide 16: Cash Generation Enabled Debt Repayment and Strategic Investments
Cash Generation Enabled Debt Repayment and Strategic Investments ($ in millions) Cash from operating activities in FY24 was CAPITALIZATION $28.1M, more than double prior year March 31, March 31, 2024 2023 Paid off full debt balance of $12.5M during the year Cash and cash equivalents $16.9 $18.3 Acce
Slide 17: Record Full Year Orders Driven By U.S. Navy Programs
Record Full Year Orders(1) Driven By U.S. Navy Programs ($ in millions; narrative compared with prior-year period unless otherwise noted) QUARTERS FY24 RECORD ORDERS (1) BY INDUSTRY $123.3 $20.1 $67.9 Refining 12% $50.8 $40.8 $34.9 $36.5 $103.2 $22.8 $15.6 $20.4 Defense $28.0 $33.0 $20.8 $20.4 66% C
Slide 18: Backlog of nearly $400 Million Provides Visibility and Stability
Backlog(1) of nearly $400 Million Provides Visibility and Stability ($ in millions; narrative compared with prior-year period unless otherwise noted) TOTAL BACKLOG(1) FY24 BACKLOG(1) : BY INDUSTRY $399.2 $390.9 Refining 8% $64.7 $62.5 $322.0 $313.3 Chem/ Petrochem 3% $301.7 Space 3% Defense $68.6 $6
Slide 19: Fiscal 2025 Revenue and Adjusted EBITDA Outlook
Fiscal 2025 Revenue and Adjusted EBITDA Outlook(1) Revenue: $200 million to $210 million FY25 Guidance(1) • Implies 11% revenue growth at midpoint of range • Implies 35% adjusted EBITDA(3) growth at midpoint Gross margin: 22% to 23% of range • Implies 9% adjusted EBITDA margin (3) at midpoint SG&A(2
Slide 20: For More Information
Graham Corporation For More Information: Christopher J. Thome Deborah K. Pawlowski Vice President - Finance, CFO and CAO Kei Advisors LLC Phone: (585) 343-2216 Phone: (716) 843-3908 dpawlowski@keiadvisors.com www.GrahamCorp.com
Slide 21: Supplemental Information
=6HM Supplemental Information
Slide 22: Disclaimer Regarding Key Performance Metrics
Disclaimer Regarding Key Performance Metrics Key Performance Indicators In addition to the foregoing non-GAAP measures, management uses the following key performance metrics to analyze and measure the Company’s financial performance and results of operations: orders, backlog, and book-to-bill ratio.
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) ADJUSTED EBITDA FY 2023 FY 2024 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD 2023 2023 2023 2023 2023 2024 2024 2024 2024 2024 Net income (loss) $ 676 $ (196) $ 368 $ (481) $ 367 $ 2,640 $ 411 $ 165 $ 1,340 $ 4,556 Acquisition & integration costs 54 - - - 54 - - 27
Slide 24: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted Net Income and Adjusted Diluted EPS Reconciliation ($ in thousands; except per share date) ADJUSTED NET INCOME FY 2023 FY 2024 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD 2023 2023 2023 2023 2023 2024 2024 2024 2024 2024 Net income (loss) $ 676 $ (196) $ 368 $ (481) $ 367 $ 2,640 $ 411 $ 165 $ 1,340 $
Slide 25: 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 26: 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 27: Northland Growth Virtual Conference
Graham Corporation Northland Growth Virtual Conference June 25, 2024 Daniel J. Thoren, President and Chief Executive Officer Christopher J. Thome, Vice President - Finance and Chief Financial Officer www.GrahamCorp.com
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