Slide 1: Q3 FY2023 Teleconference
Graham Corporation Q3 FY2023 Teleconference February 6, 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: Executing to Plan and On Track for 2027 Goals
Executing to Plan and On Track for 2027 Goals (All comparisons are with the same prior-year period) Q3 FY23 Results Demonstrate Solid Execution of Strategy Revenue Diluted EPS/ Adjusted Dil. EPS(1) Backlog $39.9M +39% $0.03 / $0.08 $293.7M +8% Sales growth reflects solid demand in defense, refining
Slide 4: Demonstrating Steady Progress
Demonstrating Steady Progress ($ in millions) SALES GROSS MARGIN $39.7 $39.9 $38.1 $36.1 $6.7 $6.2 $5.3 $28.8 $4.2 $0.6 1.9% 10.6% 18.7% 13.8% 15.6% Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Sales increased $11.1 million, or 39%, y/y Margin expansion with strong
Slide 5: Solid Execution Drives Earnings Power
Solid Execution Drives Earnings Power ($ in millions, except per share data) ADJUSTED EBITDA AND MARGIN(1) DILUTED EPS AND ADJUSTED DILUTED EPS(1) Diluted EPS Adjusted Diluted EPS $0.12 $2.7 $0.08 $2.2 $0.06 $0.03 $0.03 $1.5 ($0.35) ($0.27) ($0.02) ($0.02) $0.4 6.7% 1.0% 7.6% 4.0% 5.6% ($0.13) Q3 FY
Slide 6: Cash Management & Balance Sheet
Cash Management & Balance Sheet ($ in millions) CAPITALIZATION Cash up $3.1 million over trailing quarter December 31, September 30, 2022 2022 • Includes $8 million customer deposit for materials Cash and cash equivalents $17.2 $14.1 for defense contracts Total debt 14.2 19.1 • Offset by debt paymen
Slide 7: Q3 Orders Impacted by Timing
Q3 Orders Impacted by Timing ($ in millions) ORDERS TTM ORDERS : $175.5 MILLION Space $91.5 10% Other 11% Defense Chem/ $68.0 52% Petrochem 11% Refining $69.6 16% $45.6 $40.3 $11.3 $23.7 $20.0 YTD Book to Bill of 133% $2.9 $29.0 $7.8 ▪ For the nine-month period, orders were $151.9 million, up 26% $2
Slide 8: Very Strong Defense Backlog
Very Strong Defense Backlog ($ in millions) TOTAL BACKLOG (1) Q3 FY23 : BY INDUSTRY $313.3 $293.7 Other 3% $272.6 Defense $256.5 $260.7 80% Space 4% Chem/ Petrochem 4% Refining 9% $248.7 $234.5 $210.1 $194.8 $193.2 Longer-Term Visibility ▪ Q3 FY23 backlog up 8% year-over-year $62.5 $61.7 $67.5 $64.6
Slide 9: U.S. Navy Program Provides Long-term Stability and Visibility
U.S. Navy Program Provides Long-term Stability and Visibility • Long-term U.S. Navy contracts drive visibility and Secured Contracts recurring revenue Advantage over • Sole supplier with high barriers to entry Competition • Improved efficiencies, execution, and supply chain Margin Expansion manageme
Slide 10: 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
Slide 11: Fiscal 2023 Outlook Updated – On Track to Reach 2027 Goals
Fiscal 2023 Outlook Updated(1) – On Track to Reach 2027 Goals 2027 Strategic Goals: Revenue: $145 million to $155 million • $200 million in revenue, and Gross margin: ~16% • 10% to 15% in Adjusted EBITDA SG&A: ~15% of sales Margin Adjusted EBITDA(2): $7.5 million to $8.5 million Effective tax rate:
Slide 12: Supplemental Information
=6HM SUPPLEMENTAL INFORMATION
Slide 13: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (Unaudited, $ in thousands) Three Months Ended Nine Months Ended December 31, December 31, 2022 2021 2022 2021 Net income (loss) $ 368 $ (3,730) $ 848 $ (7,348) Acquisition related inventory step-up expense - 27 - 68 Acquisition & integration costs - 111 54 373 Change
Slide 14: Adjusted Net Income and Adjusted Diluted EPS Reconciliation
Adjusted Net Income and Adjusted Diluted EPS Reconciliation (Unaudited, $ in thousands) Three Months Ended Nine Months Ended December 31, December 31, 2022 2021 2022 2021 Net income (loss) $ 368 $ (3,730) $ 848 $ (7,348) Acquisition related inventory step-up expense - 27 - 68 Acquisition & integrati