Graham Corporation designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. The Company designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. It is a nuclear code accredited fabrication and specialty machining company. It supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Its equipment is found in applications, such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. For the defense industry, its equipment is used in nuclear propulsion power systems for the United States Navy. The Company’s products are used in a range of industrial process applications in energy markets, including petroleum refining, defense, chemical and petrochemical processing, power generation/alternative energy and other.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Hans Baldau, Associate Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Strong Quarter. Driven by continued strength across the diversified product portfolio, Graham delivered another solid quarter to start fiscal 2026. A highlight was the Energy and Process markets with strong growth driven by execution on major commercial projects and robust aftermarket demand, along with increasing momentum in emerging energy segments.
1Q26 Results. Revenue increased 11% to $55.5 million, slightly above our $54 million estimate. Gross margin improved 170 bp to 26.5%. Adjusted EBITDA rose 33% y-o-y to $6.8 million, with adjusted EBITDA margin up 200 bp to 12.3%. We were at $5.1 million. EPS increased 56% to $0.42 with adjusted EPS up 36% to $0.45. We were at $0.22 and $0.25, respectively.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Revenue increased 11% to $55.5 million, reflecting the strength of the Company’s product portfolio and diversified revenue base
Gross profit increased 19% to $14.7 million; Gross margin improved 170 basis points to 26.5%
Net income per diluted share increased 56% to $0.42; adjusted net income per diluted share1 increased 36% to $0.45
Net income increased 55% to $4.6 million; Adjusted EBITDA1 increased 33% to $6.8 million; Adjusted EBITDA margin1 improved 200 basis points to 12.3%
Orders2 were $125.9 million, driven by large defense orders; Book-to-Bill ratio2 of 2.3x and backlog2 of $482.9 million
Strong balance sheet with no debt, $10.8 million in cash, and access to $44.3 million under its revolving credit facility at quarter end to support growth initiatives
Reiterating full year fiscal 2026 guidance for all metrics provided; Remain on track to reach strategic goal of 8% to 10% annual organic revenue growth and low to mid-teen Adjusted EBITDA margins by fiscal 2027
BATAVIA, N.Y.–(BUSINESS WIRE)– Graham Corporation (NYSE: GHM) (“GHM” or the “Company”), a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the Defense, Energy & Process, and Space industries, today reported financial results for its first quarter for the fiscal year ending March 31, 2026 (“fiscal 2026”).
Graham’s President and Chief Executive Officer, Matthew J. Malone stated, “The start of fiscal 2026 demonstrates continued strength across our diversified product portfolio. We delivered strong growth in our Energy & Process markets, driven by execution on major commercial projects and robust aftermarket demand, along with increasing momentum in emerging energy segments such as small modular reactors (“SMRs”) and cryogenics. In addition, our Defense business continues to perform well, supported by recent follow-on orders, including $86.5 million to support the Virginia Class submarine program in May and $25.5 million for the MK48 Mod 7 Heavyweight Torpedo program in July, reaffirming our position as a trusted supplier to the U.S. Navy.”
Mr. Malone continued, “We remain focused on high-return initiatives that drive long-term value creation, including numerous in-process capital investments expected to generate returns above 20%. These initiatives include automated welding, enhanced radiographic testing technologies, and our new cryogenic testing facility in Florida, which we expect will improve margins and create new revenue opportunities. I’m also pleased to announce that we’ve completed the expansion of our Batavia defense facility this month. With these investments, we believe Graham is well-positioned to drive sustainable growth, deliver for our customers, and continue expanding margins.”
Quarterly net sales of $55.5 million increased 11%, or $5.5 million. Sales to the Energy & Process market contributed $5.7 million to growth driven by increased sales in the Chemical/Petrochemical and New Energy industries. The increase in Chemical/Petrochemical sales was largely due to a surface condenser order for a North American net-zero carbon emissions ethylene cracker received in June 2024, while the increase in New Energy sales was driven by increased sales to the hydrogen and SMR markets. Aftermarket sales to the Energy & Process and Defense markets of $10.4 million remained strong and were 33% higher than the prior year. See supplemental data for a further breakdown of sales by market and region.
Gross profit for the quarter increased $2.4 million to $14.7 million compared to the prior-year period of $12.4 million. As a percentage of sales, gross profit margin increased 170 basis points to 26.5%, compared to the first quarter of fiscal 2025. Increased leverage on fixed overhead costs due to the higher volume of sales discussed above, as well as an improved mix of sales related to higher margin aftermarket sales, and better execution and pricing on defense contracts were the primary drivers of this increase. For the first quarter of fiscal 2026, the impact of tariffs was not material to our consolidated financial statements in comparison to the prior year. However, we still estimate the range of potential impact of increased tariffs for the full year to be between $2 million to $5 million.
Selling, general and administrative expense (“SG&A”), including amortization, totaled $9.8 million, an increase of $0.6 million compared with the prior year. This increase reflects the investments we are making in our operations, our employees, and our technology. As a percentage of sales, SG&A, including amortization, of 17.7% decreased 90 basis points compared to the prior year period, reflective of our financial discipline.
Cash Management and Balance Sheet As expected, cash used by operating activities totaled $2.3 million for the quarter-ending June 30, 2025, primarily due to the payment of fiscal 2025 bonuses including the supplemental Barber-Nichols earnout bonus of $4.3 million in connection with the acquisition. As of June 30, 2025, cash and cash equivalents were $10.8 million, compared with $21.6 million as of March 31, 2025.
Capital expenditures for the first quarter fiscal 2025 were $7.0 million, focused on capacity expansion, increasing capabilities, and productivity improvements. All major capital projects are on time.
The Company had no debt outstanding as of June 30, 2025, with $44.3 million available on its revolving credit facility after taking into account outstanding letters of credit.
Orders, Backlog, and Book-to-Bill Ratio See supplemental data filed with the Securities and Exchange Commission on Form 8-K and provided on the Company’s website for a further breakdown of orders and backlog by market. See “Key Performance Indicators” below for important disclosures regarding Graham’s use of these metrics ($ in millions).
Orders for the first quarter of fiscal 2026 increased to $125.9 million, including the remaining $86.5 million of a $136.5 million follow-on order in support of the U.S. Navy’s Virginia Class Submarine program. Aftermarket orders for the Energy & Process and Defense markets remained strong and totaled $10.5 million for the first quarter of fiscal 2026, increasing 16% over the prior year. Book-to-bill for the first quarter of fiscal 2026 was 2.3x. Note that orders tend to be lumpy given the nature of our business (i.e. large capital projects) and in particular, orders to the Defense industry, which span multiple years and can be significantly larger in size.
Backlog at quarter end was $482.9 million, a 22% increase over the prior-year period. Approximately 35% to 40% of orders currently in backlog are expected to be converted to sales in the next twelve months, another 25% to 30% are expected to convert to sales within one to two years, and the remaining beyond two years. Approximately 87% of our backlog at June 30, 2025, was to the Defense industry, which we believe provides stability and visibility to our business.
Fiscal 2026 Outlook Based upon the results for the first quarter of fiscal 2026, as well as our expectations for the remainder of the fiscal year, we are reiterating our full year fiscal 2026 guidance provided earlier this year as follows:
Our expectations for sales and profitability assume that we will be able to operate our production facilities at planned capacity, have access to our global supply chain including our subcontractors, do not experience any global disruptions, and experience no impact from any other unforeseen events.
Webcast and Conference Call GHM’s management will host a conference call and live webcast on August 5, 2025 at 11:00 a.m. Eastern Time (“ET”) to review its financial results as well as its strategy and outlook. The review will be accompanied by a slide presentation, which will be made available immediately prior to the conference call on GHM’s investor relations website.
A question-and-answer session will follow the formal presentation. GHM’s conference call can be accessed by calling (412)-317-5195. Alternatively, the webcast can be monitored from the events section of GHM’s investor relations website.
A telephonic replay will be available from 3:00 p.m. ET today through Tuesday, August 12, 2025. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 10201479 or access the webcast replay via the Company’s website at ir.grahamcorp.com, where a transcript will also be posted once available.
About Graham Corporation Graham is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the Defense, Energy & Process, and Space industries. Graham Corporation and its family of global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps, and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems. Graham Corporation routinely posts news and other important information on its website, grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.
Safe Harbor Regarding Forward Looking Statements This news release 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 and are identified by words such as “continue,” “expects,” “future,” “outlook,” “believes,” “could,” “guidance,” “may”, “will,” “plan” and other similar words. All statements addressing operating performance, events, or developments that Graham Corporation expects or anticipates will occur in the future, including but not limited to, profitability of future projects and the business, its ability to deliver to plan, its ability to continue to strengthen relationships with customers in the Defense industry, its ability to secure future projects and applications, expected expansion and growth opportunities, anticipated sales, revenues, adjusted EBITDA, adjusted EBITDA margins, capital expenditures and SG&A expenses, the timing of conversion of backlog to sales, orders, market presence, profit margins, tax rates, foreign sales operations, customer preferences, changes in market conditions in the industries in which it operates, changes in general economic conditions and customer behavior, forecasts regarding the timing and scope of the economic recovery in its markets, and its acquisition and growth strategy, are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Graham Corporation’s most recent Annual Report filed with the Securities and Exchange Commission (the “SEC”), included under the heading entitled “Risk Factors”, and in other reports filed with the SEC.
Should one or more of these risks or uncertainties materialize or should any of Graham Corporation’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on Graham Corporation’s forward-looking statements. Except as required by law, Graham Corporation disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.
Non-GAAP Financial Measures Adjusted EBITDA is defined as consolidated net income (loss) before net interest expense, income taxes, depreciation, amortization, other acquisition related expenses, and other unusual/nonrecurring expenses. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of sales. Adjusted EBITDA and Adjusted EBITDA margin are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP. Nevertheless, Graham believes that providing non-GAAP information, such as Adjusted EBITDA and Adjusted EBITDA margin, is important for investors and other readers of Graham’s financial statements, as it is used as an analytical indicator by Graham’s management to better understand operating performance. Moreover, Graham’s credit facility also contains ratios based on Adjusted EBITDA. Because Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures and are thus susceptible to varying calculations, Adjusted EBITDA, and Adjusted EBITDA margin, as presented, may not be directly comparable to other similarly titled measures used by other companies.
Adjusted net income and adjusted net income per diluted share are defined as net income and net income per diluted share as reported, adjusted for certain items and at a normalized tax rate. Adjusted net income and adjusted net income per diluted share are not measures determined in accordance with GAAP, and may not be comparable to the measures as used by other companies. Nevertheless, Graham believes that providing non-GAAP information, such as adjusted net income and adjusted net income per diluted share, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current fiscal year’s net income and net income per diluted share to the historical periods’ net income and net income per diluted share. Graham also believes that adjusted net income per share, which adds back intangible amortization expense related to acquisitions, provides a better representation of the cash earnings of the Company.
Forward-Looking Non-GAAP Measures Adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures. The Company is unable to present a quantitative reconciliation of these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict the necessary components of such GAAP measures without unreasonable effort largely because forecasting or predicting our future operating results is subject to many factors out of our control or not readily predictable. In addition, the Company believes that such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the Company’s fiscal 2025 financial results. These non-GAAP financial measures are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with purchase accounting, quarter-end, and year-end adjustments. Any variation between the Company’s actual results and preliminary financial estimates set forth above may be material.
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 orders and backlog as measures of current and future business and financial performance, and these may not be comparable with measures provided by other companies. Orders represent written communications received from customers requesting the Company to provide products and/or services. Backlog is defined as the total dollar value of net orders received for which revenue has not yet been recognized. Management believes tracking orders and backlog are useful as they often times are leading indicators of future performance. In accordance with industry practice, contracts may include provisions for cancellation, termination, or suspension at the discretion of the customer.
The book-to-bill ratio is an operational measure that management uses to track the growth prospects of the Company. The Company calculates the book-to-bill ratio for a given period as net orders divided by net sales.
Given that each of orders, backlog, and book-to-bill ratio are operational measures and that the Company’s methodology for calculating orders, backlog and book-to-bill ratio does not meet the definition of a non-GAAP measure, as that term is defined by the U.S. Securities and Exchange Commission, a quantitative reconciliation for each is not required or provided.
Graham Corporation designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. The Company designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. It is a nuclear code accredited fabrication and specialty machining company. It supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Its equipment is found in applications, such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. For the defense industry, its equipment is used in nuclear propulsion power systems for the United States Navy. The Company’s products are used in a range of industrial process applications in energy markets, including petroleum refining, defense, chemical and petrochemical processing, power generation/alternative energy and other.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Follow-on Order. Yesterday, Graham Corporation announced the Company was awarded a follow-on order to produce critical hardware for the MK48 Mod 7 Heavyweight torpedo program. This was a sole sourced award. Graham typically receives an annual order for this program once funding is approved for the current year’s supply.
MK48 Program. The follow-on order is valued at approximately $25.5 million. Graham manufactures and tests the alternators and regulators for the MK48 Mod 7 Heavyweight torpedo through its Barber-Nichols subsidiary. We believe there are two more option years remaining under the current program in which 50-120 MK 48s are produced annually.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
BATAVIA, N.Y.–(BUSINESS WIRE)– Graham Corporation (NYSE: GHM) (“GHM” or “the Company”), a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the Defense, Energy & Process, and Space industries, today announced that it has been awarded a follow-on order to produce mission-critical hardware for the MK48 Mod 7 Heavyweight Torpedo program valued at approximately $25.5 million.
Matthew J. Malone, President and CEO, commented, “This follow-on award underscores our competitive position as a trusted supplier of mission-critical components to the U.S. Navy and allied defense programs. It reflects the strength of our engineering capabilities, highly skilled and engaged workforce, and precision manufacturing expertise. We’ve made targeted investments to improve operational efficiency to fulfill current and future demand, positioning us to drive recurring revenue, expand margins, and deliver long-term value to shareholders.”
Graham manufactures and tests the alternators and regulators for the MK48 Mod 7 Heavyweight Torpedo through its Barber-Nichols subsidiary in Arvada, CO.
About Graham Corporation Graham is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the Defense, Energy, & Process, and Space industries. Graham Corporation and its family of global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps, and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems. Graham Corporation routinely posts news and other important information on its website, grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.
Safe Harbor Regarding Forward Looking Statements This news release 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 and are identified by words such as “expects,” “future,” and other similar words. All statements addressing operating performance, events, or developments that Graham Corporation expects or anticipates will occur in the future, including but not limited to, profitability of future projects and the business, its ability to deliver to plan, its ability to secure future projects and applications, are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Graham Corporation’s most recent Annual Report filed with the Securities and Exchange Commission (the “SEC”), included under the heading entitled “Risk Factors”, and in other reports filed with the SEC.
Should one or more of these risks or uncertainties materialize or should any of Graham Corporation’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on Graham Corporation’s forward-looking statements. Except as required by law, Graham Corporation disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.
BATAVIA, N.Y.–(BUSINESS WIRE)– Graham Corporation (NYSE: GHM), a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the Defense, Energy & Process, and Space industries, announced that it will release its first quarter fiscal year 2026 financial results before financial markets open on Tuesday, August 5, 2025.
The Company will host a conference call and webcast to review its financial and operating results, strategy, and outlook. A question-and-answer session will follow.
First Quarter Fiscal Year 2026 Financial Results Conference Call
Tuesday, August 5, 2025 11:00 a.m. Eastern Time Phone: (412) 317-5195 Internet webcast link and accompanying slide presentation: ir.grahamcorp.com
A telephonic replay will be available from 3:00 p.m. ET on the day of the teleconference through Tuesday, August 12, 2025. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 10201479 or access the webcast replay via the Company’s website at ir.grahamcorp.com, where a transcript will also be posted once available.
ABOUT GRAHAM CORPORATION
Graham is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the Defense, Energy & Process, and Space, industries. Graham Corporation and its family of global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems. Graham routinely posts news and other important information on its website, grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.
Graham Corporation designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. The Company designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. It is a nuclear code accredited fabrication and specialty machining company. It supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Its equipment is found in applications, such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. For the defense industry, its equipment is used in nuclear propulsion power systems for the United States Navy. The Company’s products are used in a range of industrial process applications in energy markets, including petroleum refining, defense, chemical and petrochemical processing, power generation/alternative energy and other.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Hans Baldau, Associate Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
4Q25 Results. Revenue rose 21% to $59.3 million versus $49.1 million in 4Q24 and our $56 million estimate. Gross margin was up 110 basis points to 27%. We were at 25%. Graham reported adjusted EBITDA of $7.65 million, up 159% y-o-y, and above our $5.4 million projection. GAAP and adjusted EPS were $0.40 and $0.43, respectively, compared to $0.12 and $0.15, respectively, last year. We were at $0.26 and $0.26.
Business Environment. Graham’s business environment remains favorable, as evidenced by the recent follow on Navy award. Increased Defense budgets and being in the right space should lead to additional revenue from the Defense sector. Space and Energy continue to have positive futures also, in our opinion.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Fourth quarter 2025 results reflect continued strength in the business
Revenue grew 21% to $59.3 million driven by strength across all markets
Gross margin expanded 110 basis points to 27.0% and achieved operating margin of 9.3% compared to 3.1% in the prior-year period
Net Income was $4.4 million; Adjusted net income1 was $4.8 million and Adjusted EBITDA1 was $7.7 million or 12.9% of sales
Fiscal 2025 results demonstrate strong execution on Graham’s long-term strategic plan
Sales growth of 13% driven by Defense projects and Space demand
Gross Margin Expanded 330 Basis Points to 25.2%
Net Income was $12.2 million compared with $4.6 million in prior fiscal year; achieved Adjusted EBITDA1 of $22.4 million or 10.7% of sales
Received full year orders2 of $231.1 million, which represented a Book-to-Bill ratio2 of 1.1x
Record Backlog of $412.3 million
Initiated fiscal 2026 guidance with revenue of $225 million to $235 million, up 10% at Mid-Point over fiscal 2025 with Adjusted EBITDA1 in the range of $22 million to $28 million, up 12% at the mid-point over fiscal 2025
BATAVIA, N.Y.–(BUSINESS WIRE)– Graham Corporation (NYSE: GHM) (“GHM” or the “Company”), a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the Defense, Energy & Process, and Space industries, today reported financial results for the fourth quarter and fiscal year 2025 ending March 31, 2025 (“fiscal 2025”).
“We closed fiscal 2025 with strong momentum, as our fourth quarter results reflected solid execution and sustained demand across our diversified product portfolio,” said Daniel J. Thoren, Chief Executive Officer. “We continue to advance projects with an expected 20%+ ROIC1, including automated welding, the expansion of our Batavia, NY facility, and a new cryogenic testing facility in Florida, which will drive enhanced margins and create additional revenue opportunities.”
Mr. Thoren continued, “Looking ahead to fiscal 2026, we are well-positioned to achieve our long-term growth and profitability targets and are strategically looking to invest in key organic and inorganic growth opportunities.”
Management Transition
As previously announced on February 6, 2025, Graham began a planned management transition aligned with its succession strategy. Effective June 10, 2025, Chief Executive Officer Daniel J. Thoren will transition to Executive Chairman and Strategic Advisor. Matt Malone, currently President and Chief Operating Officer, will succeed him as CEO.
Jonathan W. Painter, Chairman of the Board, will transition to Lead Independent Director. Additionally, Michael E. Dixon, promoted to General Manager of Barber-Nichols in February 2025, will assume the role of Vice President of Graham Corporation and General Manager of Barber-Nichols.
“It has been a career highlight and honor to lead Graham Corporation over the last four years and I want to thank our Board and each one of our employees for their commitment and belief in our mission to build better companies, supply mission critical equipment to our customers, and deliver superior performance to our investors,” said Mr. Thoren. “The company is well positioned to achieve its 2027 goals we set in 2022, and I have every confidence in Matt to lead the company to even greater achievements beyond that.”
1Adjusted net income, Adjusted EBITDA and ROIC are non-GAAP measures. See attached tables and other information for important disclosures regarding Graham’s use of these non-GAAP measures.
2Orders, backlog and book-to-bill ratio are key performance metrics. See “Key Performance Indicators” below for important disclosures regarding Graham’s use of these metrics.
*Graham believes that, when used in conjunction with measures prepared in accordance with U.S. generally accepted accounting principles, adjusted net income, adjusted net income per diluted share, adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP measures, help in the understanding of its operating performance. See attached tables and other information provided at the end of this press release for important disclosures regarding Graham’s use of these non-GAAP measures.
We have updated our end market disclosures to better align with how management evaluates the business and product portfolio. As part of this change, revenue previously classified as Refining, Chemical/Petrochemical, and Other, which included New Energy product sales, will now be consolidated into one market, which has been renamed “Energy & Process.” The Defense and Space end market classifications remain unchanged. Prior period amounts have been updated to reflect this change.
Quarterly net sales of $59.3 million increased 21%, or $10.3 million. Sales to the Defense market grew by $7.7 million, or 28% from the prior year period, driven by growth in existing programs, better execution, improved pricing, and the timing of key project milestones. Energy & Process sales contributed $1.8 million to growth driven by increased sales of capital equipment to foreign markets and higher aftermarket sales. Aftermarket sales to the Energy & Process and Defense markets of $12.1 million remained strong and were 3.3% higher than the prior year. See supplemental data for a further breakdown of sales by market and region.
Gross profit for the quarter increased $3.3 million to $16.0 million compared to the prior-year period of $12.7 million. As a percentage of sales, gross profit margin increased 110 basis points to 27.0%, compared to the fiscal fourth quarter of 2024. This increase was driven by leverage on higher volume, better execution, and improved pricing, partially offset by higher incentive compensation compared to the prior year period.
Selling, general and administrative expense (“SG&A”), including amortization, totaled $10.8 million, or 18.1% of sales, down $0.3 million compared with the prior year. This decrease reflects the timing of various project expenses partially offset by higher salaries and performance-based compensation as we continue to invest in our people, our processes and our technology to drive long-term sustainable growth.
*Graham believes that, when used in conjunction with measures prepared in accordance with U.S. generally accepted accounting principles, adjusted net income, adjusted net income per diluted share, adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP measures, help in the understanding of its operating performance. See attached tables and other information provided at the end of this press release for important disclosures regarding Graham’s use of these non-GAAP measures.
Net sales of $209.9 million increased 13%, or $24.4 million. Incremental revenue from the acquisition of P3 Technologies (“P3”) in November 2023 accounted for $2.8 million of this increase. Sales to the Defense market grew by $22.4 million, or 23% from the prior year, driven by the addition of new Defense programs, the growth of existing programs, better execution, improved pricing and the timing of key project milestones. Additionally, net sales to the Space industry for fiscal 2025 increased 11% over the prior year primarily due to the addition of P3. Finally, net sales to the Energy & Process industry for fiscal 2025 was consistent with the prior year as increased sales to Asia and the Middle-East were offset by a $2.7 million decline in aftermarket sales from the record levels of fiscal 2024, but which remain strong. See supplemental data for a further breakdown of sales by market and region.
Gross profit for the year increased $12.3 million to $52.9 million compared to the prior-year period of $40.6 million. As a percentage of sales, gross profit margin increased 330 basis points to 25.2%, compared to fiscal 2024. This increase was driven by leverage on higher volume, better execution, and improved pricing. Additionally, fiscal 2025 gross profit benefited $1.3 million from a grant received from the BlueForge Alliance earlier this fiscal year to reimburse Graham for the cost of the Company’s Defense welder training programs in Batavia and related equipment. The Company currently does not expect to receive any additional welder training grants in fiscal 2026.
SG&A, including amortization, totaled $38.9 million, or 18.5% of sales, up $5.3 million compared with the prior year. This increase reflects the Company’s continued investments in its people, processes, and technology to drive long-term sustainable growth including costs related to the implementation of a new enterprise resource planning (“ERP”) system at our Batavia facility, incremental costs related to P3, and increased research and development investment, among others.
Cash Management and Balance Sheet
Cash provided by operating activities totaled $24.3 million for the year-ending March 31, 2025, a decrease of $3.8 million from the comparable period in fiscal 2024. As of March 31, 2025, cash and cash equivalents were $21.6 million, up from $16.9 million at the end of fiscal 2024.
Capital expenditures for fiscal 2025 were $19.0 million, focused on capacity expansion, increasing capabilities, and productivity improvements. All major capital projects are on time and on budget.
The Company had no debt outstanding March 31, 2025 with $44.7 million available on its revolving credit facility after taking into account outstanding letters of credit.
Orders, Backlog, and Book-to-Bill Ratio
See supplemental data filed with the Securities and Exchange Commission on Form 8-K and provided on the Company’s website for a further breakdown of orders and backlog by market. See “Key Performance Indicators” below for important disclosures regarding Graham’s use of these metrics ($ in millions).
Orders for the fourth quarter of fiscal 2025 increased to $86.9 million, including $50.0 million, of a $136.5 million total contract value, to procure long-lead time materials for follow-on contracts to support the U.S. Navy’s Virginia Class Submarine program. Aftermarket orders for the Energy & Process and Defense markets remained strong and totaled $11.8 million for the fourth quarter of fiscal 2025, an increase of 50% over the prior year.
For fiscal 2025, orders decreased to $231.1 million, primarily due to a record level of orders in fiscal 2024 as a result of follow-on orders for critical U.S. Navy programs related to the Columbia Class submarine and Ford Class carrier programs. Aftermarket orders in fiscal 2025 for the Energy & Process, and Defense markets increased 8% to $46.6 million, compared with fiscal 2024.
Orders tend to be lumpy given the nature of our business (i.e. large capital projects) and in particular, orders to the Defense industry, which span multiple years and can be significantly larger in size. Book-to-bill for fiscal 2025 was 1.1x.
Backlog as of March 31, 2025, was $412.3 million, a 5% increase over the prior-year period. Approximately 45% of orders currently in backlog are expected to be converted to sales in the next twelve months and another 25% to 30% are expected to convert to sales within one to two years. Approximately 83% of our backlog at March 31, 2025 was to the Defense industry, which we believe provides stability and visibility to our business.
Fiscal 2026 Outlook
“I am pleased to announce our fiscal 2026 outlook, which reflects the continued momentum in our business and the initial impacts of the strategic investments we have made. The Company is deploying capital to support our organic and inorganic growth initiatives, while making strategic improvements to enhance our operations and drive margin expansion, which is being enabled by our strong balance sheet. The outlook we are providing reflects the expected impact of tariffs on our fiscal 2026 results, which we estimate to be approximately $2.0 million to $5.0 million. This is subject to change based on the fluidity of global trade policy,” said Christopher Thome, Chief Financial Officer.
(as of June 9, 2025)
Fiscal 2026 Guidance
Net Sales
$225 million to $235 million
Gross Margin(1)
24.5% to 25.5% of sales
SG&A expense (including amortization)(2)
17.5% to 18.5% of sales
Adjusted EBITDA(1)(3)
$22 million to $28 million
Effective Tax Rate
20% to 22%
Capital Expenditures
$15.0 million to $18.0 million
(1)
Includes the estimated impact of increased tariffs over the prior year of approximately $2.0 million to $5.0 million.
(2)
Includes approximately $6.0 million to $7.0 million of Barber-Nichols supplemental performance bonus, equity-based compensation, and enterprise resource planning (“ERP”) conversion costs included in SG&A expense.
(3)
Excludes net interest expense (income), income taxes, depreciation, and amortization from net income, as well as approximately $2.0 million to $3.0 million of equity-based compensation and ERP conversion costs included in SG&A expense, net.
Our expectations for sales and profitability assumes that we will be able to operate our production facilities at planned capacity, have access to our global supply chain including our subcontractors, do not experience any global disruptions, and experience no impact from any other unforeseen events.
Webcast and Conference Call
GHM’s management will host a conference call and live webcast on June 9, 2025 at 11:00 a.m. Eastern Time (“ET”) to review its financial results as well as its strategy and outlook. The review will be accompanied by a slide presentation, which will be made available immediately prior to the conference call on GHM’s investor relations website.
A question-and-answer session will follow the formal presentation. GHM’s conference call can be accessed by calling (201) 689-8560. Alternatively, the webcast can be monitored from the events section of GHM’s investor relations website.
A telephonic replay will be available from 3:00 p.m. ET today through Monday, June 16, 2025. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13753289 or access the webcast replay via the Company’s website at ir.grahamcorp.com, where a transcript will also be posted once available.
About Graham Corporation
Graham is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the Defense, Energy & Process, and Space industries. Graham Corporation and its family of global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps, and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems. Graham Corporation routinely posts news and other important information on its website, grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.
Safe Harbor Regarding Forward Looking Statements
This news release 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 and are identified by words such as “continue,” “expects,” “future,” “goal,” “outlook,” “anticipates,” “believes,” “could,” “guidance,” ”may”, “will,” “plan” and other similar words. All statements addressing operating performance, events, or developments that Graham Corporation expects or anticipates will occur in the future, including but not limited to, profitability of future projects and the business, its ability to deliver to plan, its ability to continue to strengthen relationships with customers in the Defense industry, its ability to secure future projects and applications, expected expansion and growth opportunities, anticipated sales, revenues, adjusted EBITDA, adjusted EBITDA margins, capital expenditures and SG&A expenses, the timing of conversion of backlog to sales, orders, market presence, profit margins, tax rates, foreign sales operations, customer preferences, changes in market conditions in the industries in which it operates, changes in general economic conditions and customer behavior, forecasts regarding the timing and scope of the economic recovery in its markets, and its acquisition and growth strategy, are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Graham Corporation’s most recent Annual Report filed with the Securities and Exchange Commission (the “SEC”), included under the heading entitled “Risk Factors”, and in other reports filed with the SEC.
Should one or more of these risks or uncertainties materialize or should any of Graham Corporation’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on Graham Corporation’s forward-looking statements. Except as required by law, Graham Corporation disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.
Non-GAAP Financial Measures
Adjusted EBITDA is defined as consolidated net income (loss) before net interest expense, income taxes, depreciation, amortization, other acquisition related expenses, and other unusual/nonrecurring expenses. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of sales. Adjusted EBITDA and Adjusted EBITDA margin are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP. Nevertheless, Graham believes that providing non-GAAP information, such as Adjusted EBITDA and Adjusted EBITDA margin, is important for investors and other readers of Graham’s financial statements, as it is used as an analytical indicator by Graham’s management to better understand operating performance. Moreover, Graham’s credit facility also contains ratios based on Adjusted EBITDA. Because Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures and are thus susceptible to varying calculations, Adjusted EBITDA, and Adjusted EBITDA margin, as presented, may not be directly comparable to other similarly titled measures used by other companies.
Adjusted net income and adjusted net income per diluted share are defined as net income and net income per diluted share as reported, adjusted for certain items and at a normalized tax rate. Adjusted net income and adjusted net income per diluted share are not measures determined in accordance with GAAP, and may not be comparable to the measures as used by other companies. Nevertheless, Graham believes that providing non-GAAP information, such as adjusted net income and adjusted net income per diluted share, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current fiscal year’s net income and net income per diluted share to the historical periods’ net income and net income per diluted share. Graham also believes that adjusted net income per share, which adds back intangible amortization expense related to acquisitions, provides a better representation of the cash earnings of the Company.
ROIC is defined as a return on invested capital and is calculated by dividing net operating profit after taxes by the total invested capital. ROIC is not a measure determined in accordance with GAAP. Nevertheless, Graham believes that providing ROIC is important for investors and other readers of Graham’s financial statements, as it is used as an analytical indicator by Graham’s management to better understand profitability and efficiency of use of capital for certain projects. Because ROIC is a non-GAAP measure and is thus susceptible to varying calculations, ROIC, as presented, may not be directly comparable to other similarly titled measures used by other companies.
Forward-Looking Non-GAAP Measures
Forward-looking ROIC, adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures. The Company is unable to present a quantitative reconciliation of these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict the necessary components of such GAAP measures without unreasonable effort largely because forecasting or predicting our future operating results is subject to many factors out of our control or not readily predictable. In addition, the Company believes that such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the Company’s fiscal 2025 financial results. These non-GAAP financial measures are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with purchase accounting, quarter-end, and year-end adjustments. Any variation between the Company’s actual results and preliminary financial estimates set forth above may be material.
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 orders and backlog as measures of current and future business and financial performance, and these may not be comparable with measures provided by other companies. Orders represent written communications received from customers requesting the Company to provide products and/or services. Backlog is defined as the total dollar value of net orders received for which revenue has not yet been recognized. Management believes tracking orders and backlog are useful as they often times are leading indicators of future performance. In accordance with industry practice, contracts may include provisions for cancellation, termination, or suspension at the discretion of the customer.
The book-to-bill ratio is an operational measure that management uses to track the growth prospects of the Company. The Company calculates the book-to-bill ratio for a given period as net orders divided by net sales.
Given that each of orders, backlog, and book-to-bill ratio are operational measures and that the Company’s methodology for calculating orders, backlog and book-to-bill ratio does not meet the definition of a non-GAAP measure, as that term is defined by the U.S. Securities and Exchange Commission, a quantitative reconciliation for each is not required or provided.
Acquisition and integration (income) expense are incremental costs that are directly related to and as a result of the P3 acquisition or the subsequent accounting for the contingent earn-out liability. These costs (income) may include, among other things, professional, consulting and other fees, system integration costs, and contingent consideration fair value adjustments. ERP implementation costs primarily relate to consulting costs (training, data conversion, and project management) incurred in connection with the ERP system being implemented throughout our Batavia, New York facility in order to enhance efficiency and productivity and are not expected to recur once the project is completed. Debt amendment costs consist of accelerated write-offs of unamortized deferred debt issuance costs and discounts, prepayment penalties and attorney fees in connection with the amendment of our credit facility in October 2023.
BATAVIA, N.Y.–(BUSINESS WIRE)– Graham Corporation (NYSE: GHM), a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the defense, space, energy, and process industries, announced that it will release its fourth quarter and fiscal year 2025 financial results before financial markets open on Monday, June 9, 2025.
The Company will host a conference call and webcast to review its financial and operating results, strategy, and outlook. A question-and-answer session will follow.
Fourth Quarter Fiscal Year 2025 Financial Results Conference Call
Monday, June 9, 2025 11:00 a.m. Eastern Time Phone: (201) 689-8560 Internet webcast link and accompanying slide presentation: ir.grahamcorp.com
A telephonic replay will be available from 3:00 p.m. ET on the day of the teleconference through Monday, June 16, 2025. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13753289 or access the webcast replay via the Company’s website at ir.grahamcorp.com, where a transcript will also be posted once available.
ABOUT GRAHAM CORPORATION Graham is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the defense, space, energy and process industries. Graham Corporation and its family of global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems.
Graham routinely posts news and other important information on its website, grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.
Graham Corporation designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. The Company designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. It is a nuclear code accredited fabrication and specialty machining company. It supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Its equipment is found in applications, such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. For the defense industry, its equipment is used in nuclear propulsion power systems for the United States Navy. The Company’s products are used in a range of industrial process applications in energy markets, including petroleum refining, defense, chemical and petrochemical processing, power generation/alternative energy and other.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Hans Baldau, Associate Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
New Award. Yesterday, Graham announced that its Barber-Nichols subsidiary was awarded a $136.5 million follow-on contract to support the U.S. Navy’s Virginia Class Submarine program. This new award strengthens Graham’s position as a critical supplier to the U.S. Navy’s undersea programs.
Details. The contract period of performance extends from April 2025 through February 2034. Graham recognized approximately $50 million in backlog from the contract during the fourth quarter of the fiscal year ended March 31, 2025 to procure long-lead-time materials. As a reminder, the backlog at the end of the fiscal third quarter totaled $384.7 million, just below a record high.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Secures $136.5 million contract to support the Virginia class submarine program
Strengthens Graham’s position as a critical supplier to U.S. Navy’s submarine programs
BATAVIA, N.Y.–(BUSINESS WIRE)– Graham Corporation (NYSE: GHM) (“Graham” or “the Company”), a global leader in the design and manufacture of mission critical fluid, power, heat transfer, and vacuum technologies for the defense, space, energy, and process industries, today announced that its wholly-owned subsidiary Barber-Nichols, LLC (“Barber-Nichols”) has been awarded a $136.5 million follow-on contract to support the U.S. Navy’s Virginia Class Submarine program.
The period of performance extends from April 2025 through February 2034. The Company recognized approximately $50 million in backlog1 from this contract award during the fourth quarter of its fiscal year ending March 31, 2025 to procure long-lead time materials.
Michael E. Dixon, General Manager of Barber-Nichols, commented, “This substantial contract award reinforces our position as a trusted supplier of critical naval components and builds upon our successful execution of previous contracts for Virginia Class Submarines.”
This contract provides an opportunity to showcase the Company’s advanced engineering and manufacturing capabilities. Graham’s long-standing partnership with HII’s Newport News Shipbuilding division (NNS) has led to significant investments in machinery and facilities, ensuring optimal performance in delivering mission-critical systems for the U.S. Navy.
About Graham Corporation
Graham is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the defense, space, energy, and process industries. Graham Corporation and its family of global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps, and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems. Graham Corporation routinely posts news and other important information on its website, grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.
__________________________
1 Backlog is a key performance metric. See “Key Performance Indicator” below for important disclosures regarding Graham’s use of this metric.
Safe Harbor Regarding Forward Looking Statements
This news release 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 and are identified by words such as “expects,” “opportunity” and other similar words. All statements addressing operating performance, events, or developments that Graham Corporation expects or anticipates will occur in the future, including but not limited to, profitability of future projects and the business, its ability to deliver to plan, its ability to meet customers’ shipment and delivery expectations, its ability to continue to strengthen relationships with customers in the defense industry, and the timing of conversion of backlog to sales, are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Graham Corporation’s most recent Annual Report filed with the Securities and Exchange Commission (the “SEC”), included under the heading entitled “Risk Factors”, and in other reports filed with the SEC.
Should one or more of these risks or uncertainties materialize or should any of Graham Corporation’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on Graham Corporation’s forward-looking statements. Except as required by law, Graham Corporation disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.
Key Performance Indicator
Management uses the backlog to analyze and measure the Company’s financial performance and results of operations. Management uses backlog as measure of current and future business and financial performance, and it may not be comparable with measures provided by other companies. Backlog is defined as the total dollar value of net orders received for which revenue has not yet been recognized. Management believes tracking backlog is useful as it often times is a leading indicator of future performance. In accordance with industry practice, contracts may include provisions for cancellation, termination, or suspension at the discretion of the customer.
Given that backlog is an operational measure and that the Company’s methodology for calculating backlog does not meet the definition of a non-GAAP measure, as that term is defined by the U.S. Securities and Exchange Commission, a quantitative reconciliation for it is not required or provided.
BATAVIA, N.Y.–(BUSINESS WIRE)– Graham Corporation (NYSE: GHM) (“GHM” or “the Company”), a global leader in the design and manufacture of mission critical fluid, power, heat transfer, and vacuum technologies for the defense, space, energy, and process industries, today announced a strategic investment to support the implementation of new Radiographic Testing (“RT”) equipment at Graham’s Batavia, New York facility.
The investment of $2.2 million, from one of GHM’s customers, will enhance the Company’s capabilities in evaluating critical welds in support of the Columbia and Virginia class submarine programs. As part of the investment, Graham will also contribute $1.4 million for a total project cost of $3.6 million.
Daniel J. Thoren, CEO commented, “This strategic investment in RT equipment represents our commitment to delivering the highest quality components for critical naval defense programs. The upgraded RT capabilities at our Batavia facility is expected to significantly enhance our production efficiency while ensuring superior quality control for the vital welds that support the Columbia and Virginia class submarine programs. We’re grateful for our customer’s commitment to drive enhanced manufacturing infrastructure and are excited to continue our partnership.”
The strategic investment creates opportunities to support future, multi-year orders with potential enhanced revenue expected to begin in calendar year 2026.
This agreement builds upon previously announced investments by partners, including $13.5 million to expand defense production capabilities in Batavia in August 2023 and $2.1 million by the BlueForge Alliance in July 2024 to expand Graham’s welder training program in support of the U.S. Navy’s Submarine Industrial Base initiatives.
About Graham Corporation
Graham is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the defense, space, energy, and process industries. Graham Corporation and its family of global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps, and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems. Graham Corporation routinely posts news and other important information on its website, grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.
Safe Harbor Regarding Forward Looking Statements
This news release 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 and are identified by words such as “continue,” “expects,” “future,” “will,” and other similar words. All statements addressing operating performance, events, or developments that Graham Corporation expects or anticipates will occur in the future, including but not limited to, expected expansion and growth opportunities, and expected benefits from the implementation of new RT equipment, are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Graham Corporation’s most recent Annual Report filed with the Securities and Exchange Commission (the “SEC”), included under the heading entitled “Risk Factors”, and in other reports filed with the SEC.
Should one or more of these risks or uncertainties materialize or should any of Graham Corporation’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on Graham Corporation’s forward-looking statements. Except as required by law, Graham Corporation disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.
The current market sentiment is one of extreme fear, with widespread selling across many small-cap stocks, especially those in the Russell 2000 index. A variety of factors, including tariffs and broader market uncertainty, have led to this wholesale selling, and as a result, many fundamentally strong small companies are being punished. However, for those willing to take a closer look, this fear-induced market drop may present some excellent investment opportunities.
On Friday, the Russell 2000 was down 27%, a sharp decline that reflects how smaller companies, particularly those in this index, are feeling the brunt of the market’s volatility. The Russell 2000 is made up of small-cap companies, which are inherently more volatile and have less liquidity than larger companies. As a result, they tend to experience more extreme price swings in response to broader market movements. This has created a situation where many small-cap stocks are now trading at huge discounts.
Take, for example, FreightCar America (RAIL). Just last December, this stock was trading at around $14. Now, it’s hovering around $4.50. Despite the severe decline, this is a stock that is fundamentally sound. The company is exempt from tariffs, has improved its financials with a successful refinancing deal in December, and has a solid business model. Yet, the stock continues to trade lower because of the broader market selloff affecting the Russell 2000 ETF. This creates a disconnect between the company’s true value and its current price.
Similarly, Graham (GHM), a defense manufacturer, was trading at $52 just a few months ago. Today, it’s at $27, representing a 50% discount on a fundamentally strong company. The Trump administration’s push to build more ships should actually work in Graham’s favor, making this steep decline even more perplexing. The fear in the market has led to excessive selling, but for long-term investors, this represents a buying opportunity.
And then there’s Eledon Pharmaceuticals (ELDN), a biopharmaceutical company whose stock has dropped from $5.50 to $2.80. This is a company with improving fundamentals, particularly positive patient data, yet the stock price has fallen sharply. This disconnect between price and performance highlights how the selloff has been more about broader market panic than about the company’s intrinsic value.
The bottom line is that there are real bargains out there in small-cap stocks for individual investors who are willing to look past the short-term fear. The Russell 2000 index has been hit harder than other indexes due to the smaller size and lower liquidity of the companies involved. As a result, the impact of impulsive, panic-driven selling is more pronounced in this index than in the larger ones.
For investors with staying power, particularly those with a 2-3 year horizon, the current market turmoil presents a significant opportunity. Many of these companies, which are being unfairly dragged down by the broader market, have strong fundamentals and the potential to rebound once market sentiment stabilizes. As the market continues to digest these challenges, patient investors may see significant returns as these companies recover and grow.
Graham Corporation designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. The Company designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. It is a nuclear code accredited fabrication and specialty machining company. It supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Its equipment is found in applications, such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. For the defense industry, its equipment is used in nuclear propulsion power systems for the United States Navy. The Company’s products are used in a range of industrial process applications in energy markets, including petroleum refining, defense, chemical and petrochemical processing, power generation/alternative energy and other.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
3Q25 Results. Revenue increased 7.3% to $47.0 million, driven by continued strength in key end-markets. We had forecast $48 million in revenue. Gross margin rose 260 basis points y-o-y to 24.8% of sales. Graham reported adjusted EBITDA of $4.0 million in the quarter, an 8.6% margin, compared to $3.0 million and 6.8% in the year ago period. Net income was $1.6 million, or $0.14/sh, with adjusted EPS of $0.18/sh. In the same period last year, net income totaled $165,000, or $0.02/sh, and adjusted EPS was $0.13. We had projected an adjusted EPS of $0.13.
Orders. As expected, orders for 3Q25 declined to $24.8 million, given the higher level of orders earlier in the fiscal year. Book-to-bill for the first nine months of the year was 1.0. Backlog at quarter end was $384.7 million, down 3.6% over the prior-year period and down 5.5% sequentially.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
