Latest news with #GrahamCorporation
Yahoo
2 hours ago
- Business
- Yahoo
Why Is Graham Corporation (GHM) Stock Soaring Today
Shares of industrial fluid and energy systems manufacturer Graham Corporation (NYSE: GHM) jumped 8.8% in the afternoon session after the company reported strong first-quarter 2025 (fiscal Q4) results, which blew past analysts' revenue, EPS, and EBITDA expectations. The outperformance was driven by broad-based sales growth, particularly in the Defense segment, which jumped 28% due to new and existing programs advancing on schedule and at better pricing. Looking ahead, the company's full-year adjusted EBITDA guidance for fiscal 2026 was comfortably ahead of Wall Street's targets. Momentum also appeared intact with a book-to-bill ratio above one and record backlog levels, which reflected sustained demand in core government and industrial markets. Zooming out, we think this was a solid print. Is now the time to buy Graham Corporation? Access our full analysis report here, it's free. Graham Corporation's shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move we wrote about was 13 days ago when the stock gained 7.3% after the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand. Graham Corporation is up 3.8% since the beginning of the year, and at $45.82 per share, it is trading close to its 52-week high of $49.72 from February 2025. Investors who bought $1,000 worth of Graham Corporation's shares 5 years ago would now be looking at an investment worth $3,247. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Sign in to access your portfolio
Yahoo
6 hours ago
- Business
- Yahoo
Graham Corporation (NYSE:GHM) Reports Upbeat Q1, Stock Jumps 13%
Industrial fluid and energy systems manufacturer Graham Corporation (NYSE: GHM) announced better-than-expected revenue in Q1 CY2025, with sales up 20.9% year on year to $59.35 million. The company's full-year revenue guidance of $230 million at the midpoint came in 1.9% above analysts' estimates. Its GAAP profit of $0.40 per share was significantly above analysts' consensus estimates. Is now the time to buy Graham Corporation? Find out in our full research report. Revenue: $59.35 million vs analyst estimates of $55.67 million (20.9% year-on-year growth, 6.6% beat) EPS (GAAP): $0.40 vs analyst estimates of $0.18 (significant beat) Adjusted EBITDA: $7.65 million vs analyst estimates of $4.77 million (12.9% margin, 60.5% beat) EBITDA guidance for the upcoming financial year 2026 is $25 million at the midpoint, above analyst estimates of $23.77 million Operating Margin: 9.3%, up from -3% in the same quarter last year Free Cash Flow was -$8.71 million, down from $4.60 million in the same quarter last year Backlog: $412.3 million at quarter end Market Capitalization: $457.9 million '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. Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE:GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors. A company's long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Graham Corporation's 18.3% annualized revenue growth over the last five years was incredible. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Graham Corporation's annualized revenue growth of 15.6% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. This quarter, Graham Corporation reported robust year-on-year revenue growth of 20.9%, and its $59.35 million of revenue topped Wall Street estimates by 6.6%. Looking ahead, sell-side analysts expect revenue to grow 7.4% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Graham Corporation was profitable over the last five years but held back by its large cost base. Its average operating margin of 2% was weak for an industrials business. This result isn't too surprising given its low gross margin as a starting point. On the plus side, Graham Corporation's operating margin rose by 4 percentage points over the last five years, as its sales growth gave it operating leverage. This quarter, Graham Corporation generated an operating margin profit margin of 9.3%, up 12.3 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Graham Corporation's EPS grew at an astounding 42.3% compounded annual growth rate over the last five years, higher than its 18.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. We can take a deeper look into Graham Corporation's earnings to better understand the drivers of its performance. As we mentioned earlier, Graham Corporation's operating margin expanded by 4 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Graham Corporation, its two-year annual EPS growth of 645% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base. In Q1, Graham Corporation reported EPS at $0.40, up from $0.12 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Graham Corporation's full-year EPS of $1.11 to shrink by 10.4%. We were impressed by how significantly Graham Corporation blew past analysts' revenue, EPS, and EBITDA expectations this quarter. We were also excited its full-year EBITDA guidance outperformed Wall Street's estimates. Zooming out, we think this was a solid print. The stock traded up 13% to $47.50 immediately following the results. Graham Corporation put up rock-solid earnings, but one quarter doesn't necessarily make the stock a buy. Let's see if this is a good investment. If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free. 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Associated Press
8 hours ago
- Business
- Associated Press
Graham Corporation Reports Fourth Quarter and Full-Year Fiscal 2025 Results
BATAVIA, N.Y.--(BUSINESS WIRE)--Jun 9, 2025-- 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%+ ROIC 1, 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.' *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. 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 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, 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. View source version on CONTACT: Christopher J. Thome Vice President - Finance and CFO Phone: (585) 343-2216Tom Cook Investor Relations (203) 682-8250 [email protected] KEYWORD: NEW YORK UNITED STATES NORTH AMERICA INDUSTRY KEYWORD: AEROSPACE MANUFACTURING MACHINERY ENGINEERING CHEMICALS/PLASTICS SOURCE: Graham Corporation Copyright Business Wire 2025. PUB: 06/09/2025 06:30 AM/DISC: 06/09/2025 06:28 AM
Yahoo
8 hours ago
- Business
- Yahoo
Graham Corporation Reports Fourth Quarter and Full-Year Fiscal 2025 Results
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., June 09, 2025--(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." 1 Adjusted 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. 2 Orders, 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. Fourth Quarter Fiscal 2025 Performance Review (All comparisons are with the same prior-year period unless noted otherwise.) ($ in thousands except per share data) Q4 FY25 Q4 FY24 $ Change % Change Net sales $ 59,345 $ 49,070 $ 10,275 21% Gross profit $ 16,008 $ 12,694 $ 3,314 26% Gross margin 27.0 % 25.9 % +110 bps Operating profit $ 5,519 $ 1,524 $ 3,995 262% Operating margin 9.3 % 3.1 % +620 bps Net income $ 4,395 $ 1,340 $ 3,055 228% Net income margin 7.4 % 2.7 % +470 bps Net income per diluted share $ 0.40 $ 0.12 $ 0.28 233% Adjusted net income* $ 4,752 $ 1,608 $ 3,144 195% Adjusted net income per diluted share* $ 0.43 $ 0.15 $ 0.28 187% Adjusted EBITDA* $ 7,650 $ 2,955 $ 4,695 159% Adjusted EBITDA margin* 12.9 % 6.0 % +690 bps *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 $0.3 million compared with the prior year. This decrease reflects the timing of various project expenses partially offset by higher salaries and performance-based compensation as we continue to invest in our people, our processes and our technology to drive long-term sustainable growth. Full Year Fiscal 2025 Performance Review (All comparisons are with the same prior-year period unless noted otherwise.) ($ in thousands except per share data) FY 2025 FY 2024 Change % Change Net sales $ 209,896 $ 185,533 $ 24,363 13% Gross profit $ 52,861 $ 40,585 $ 12,276 30% Gross margin 25.2 % 21.9 % +330 bps Operating profit $ 15,188 $ 6,922 $ 8,266 119% Operating margin 7.2 % 3.7 % +350 bps Net income $ 12,230 $ 4,556 $ 7,674 168% Net income margin 5.8 % 2.5 % +330 bps Net income per diluted share $ 1.11 $ 0.42 $ 0.69 164% Adjusted net income* $ 13,716 $ 6,796 $ 6,920 102% Adjusted net income per diluted share* $ 1.24 $ 0.63 $ 0.61 97% Adjusted EBITDA* $ 22,429 $ 13,285 $ 9,144 69% Adjusted EBITDA margin* 10.7 % 7.2 % +350 bps *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). Q4 24 FY24 Q1 25 Q2 25 Q3 25 Q4 25 FY25 Orders $ 40.8 $ 268.4 $ 55.8 $ 63.7 $ 24.8 $ 86.9 $ 231.1 Backlog $ 390.9 $ 390.9 $ 396.8 $ 407.0 $ 384.7 $ 412.3 $ 412.3 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 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, 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. Consolidated Statements of Operations - Unaudited ($ in thousands, except per share data) Three Months Ended Year Ended March 31, March 31, 2025 2024 %Change 2025 2024 %Change Net sales $ 59,345 $ 49,070 21% $ 209,896 $ 185,533 13% Cost of products sold 43,337 36,376 19% 157,035 144,948 8% Gross profit 16,008 12,694 26% 52,861 40,585 30% Gross margin 27.0 % 25.9 % 25.2 % 21.9 % Operating expenses and income: Selling, general and administrative 10,322 10,654 (3%) 37,143 32,217 15% Selling, general and administrative – amortization 436 436 0% 1,745 1,366 28% Other operating (income) expense, net (269 ) 80 NA (1,215 ) 80 NA Operating profit 5,519 1,524 262% 15,188 6,922 119% Operating margin 9.3 % 3.1 % 7.2 % 3.7 % Loss on extinguishment of debt - - NA - 726 NA Other expense, net 91 94 (3%) 364 374 NA Interest (income) expense, net (141 ) (29 ) 386% (583 ) 248 NA Income before provision for income taxes 5,569 1,459 282% 15,407 5,574 176% Provision for income taxes 1,174 119 887% 3,177 1,018 212% Net income $ 4,395 $ 1,340 228% $ 12,230 $ 4,556 168% Per share data: Basic: Net income $ 0.40 $ 0.12 233% $ 1.12 $ 0.42 167% Diluted: Net income $ 0.40 $ 0.12 233% $ 1.11 $ 0.42 164% Weighted average common shares outstanding: Basic 10,898 10,844 10,884 10,743 Diluted 11,115 10,988 11,066 10,844 NA: Not Applicable Consolidated Balance Sheets (Amounts in thousands, except per share data) March 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 21,577 $ 16,939 Trade accounts receivable, net of allowances ($630 and $79 at March 31, 2025 and 2024, respectively) 35,507 44,400 Unbilled revenue 38,494 28,015 Inventories 40,025 33,410 Prepaid expenses and other current assets 4,249 3,561 Income taxes receivable 1,520 - Total current assets 141,372 126,325 Property, plant and equipment, net. 50,649 32,080 Prepaid pension asset 5,950 6,396 Operating lease assets 6,386 7,306 Goodwill 25,520 ... 25,520 Customer relationships, net 13,159 14,299 Technology and technical know-how, net 10,310 11,065 Other intangible assets, net 6,858 7,181 Deferred income tax asset 1,502 2,983 Other assets 2,404 724 Total assets $ 264,110 $ 233,879 Liabilities and stockholders' equity Current liabilities: Current portion of finance lease obligations $ 21 $ 20 Accounts payable 27,309 20,788 Accrued compensation 19,161 16,800 Accrued expenses and other current liabilities 4,322 6,666 Customer deposits 84,062 71,987 Operating lease liabilities 1,275 1,237 Income taxes payable - 715 Total current liabilities 136,150 118,213 Finance lease obligations 44 65 Operating lease liabilities 5,514 6,449 Accrued pension and postretirement benefit liabilities 1,192 1,254 Other long-term liabilities 1,633 2,332 Total liabilities 144,533 128,313 Stockholders' equity: Preferred stock, $1.00 par value, 500 shares authorized - - Common stock, $0.10 par value, 25,500 shares authorized, 11,077 and 10,993 shares issued and 10,903 and 10,850 shares outstanding at March 31, 2025 and 2024, respectively 1,107 1,099 Capital in excess of par value 34,616 32,015 Retained earnings 94,229 81,999 Accumulated other comprehensive loss (6,987 ) (7,013 ) Treasury stock (174 and 143 shares at March 31, 2025 and 2024, respectively) (3,388 ) (2,534 ) Total stockholders' equity 119,577 105,566 Total liabilities and stockholders' equity $ 264,110 $ 233,879 Consolidated Statements of Cash Flows (Amounts in thousands) Year Ended March 31, 2025 2024 Operating activities: Net income $ 12,230 $ 4,556 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,718 3,275 Amortization 2,218 2,157 Virgin Orbit and other bad debt reserves 829 95 Amortization of unrecognized prior service cost and actuarial losses 781 843 Amortization of debt issuance costs - 131 Equity-based compensation expense 1,957 1,279 Gain on disposal or sale of property, plant and equipment - (5 ) Change in fair value of contingent consideration (1,215 ) 80 Loss on extinguishment of debt - 726 Deferred income taxes 1,471 (472 ) (Increase) decrease in operating assets, net of acquisitions: Accounts receivable 7,999 (20,724 ) Unbilled revenue (10,595 ) 11,855 Inventories (6,627 ) (6,220 ) Income taxes receivable (2,235 ) 998 Prepaid expenses and other current and non-current assets (2,190 ) (2,199 ) Operating lease assets 1,294 1,212 Prepaid pension asset (234 ) (287 ) Increase (decrease) in operating liabilities, net of acquisitions: Accounts payable 3,491 401 Accrued compensation, accrued expenses and other current and non-current liabilities 639 6,011 Customer deposits 12,090 25,572 Operating lease liabilities (1,272 ) (1,119 ) Long-term portion of accrued compensation, accrued pension liability and accrued postretirement benefits (33 ) (45 ) Net cash provided by operating activities 24,316 28,120 Investing activities: Purchase of property, plant and equipment (18,957 ) (9,226 ) Proceeds from disposal of property, plant and equipment - 44 Acquisition of P3 Technologies, LLC, net of cash acquired (170 ) (6,812 ) Net cash used by investing activities (19,127 ) (15,994 ) Financing activities: Principal repayments on debt - (25,500 ) Proceeds from the issuance of debt - 13,000 Repayments on finance lease obligations (320 ) (316 ) Payment of debt exit costs - (752 ) Payment of debt issuance costs - (241 ) Issuance of common stock 653 476 Purchase of treasury stock (854 ) (58 ) Net cash used by financing activities (521 ) (13,391 ) Effect of exchange rate changes on cash (30 ) (53 ) Net increase (decrease) in cash and cash equivalents 4,638 (1,318 ) Cash and cash equivalents at beginning of year 16,939 18,257 Cash and cash equivalents at end of year $ 21,577 $ 16,939 Adjusted EBITDA Reconciliation (Unaudited, $ in thousands) Three Months Ended Year Ended March 31, March 31, 2025 2024 2025 2024 Net income $ 4,395 $ 1,340 $ 12,230 $ 4,556 Acquisition & integration (income) expense (270 ) 158 (1,170 ) 432 ERC tax credit, net - (702 ) - (702 ) Debt amendment costs - 37 - 781 ERP Implementation costs 178 185 882 241 Net interest (income) expense (141 ) (29 ) (583 ) 248 Income tax expense 1,174 119 3,177 1,018 Equity-based compensation expense 753 277 1,957 1,279 Depreciation & amortization 1,561 1,570 5,936 5,432 Adjusted EBITDA $ 7,650 $ 2,955 $ 22,429 $ 13,285 Net sales $ 59,345 $ 49,070 $ 209,896 $ 185,533 Net income margin 7.4 % 2.7 % 5.8 % 2.5 % Adjusted EBITDA margin 12.9 % 6.0 % 10.7 % 7.2 % Adjusted Net Income and Adjusted Net Income per Diluted Share Reconciliation (Unaudited, $ in thousands, except per share amounts) Three Months Ended Year Ended March 31, March 31, 2025 2024 2025 2024 Net income $ 4,395 $ 1,340 $ 12,230 $ 4,556 Acquisition & integration (income) expense (270 ) 158 (1,170 ) 432 Amortization of intangible assets 555 670 2,218 2,157 ERC tax credit, net - (702 ) - (702 ) Debt amendment costs - 37 - 781 ERP Implementation costs 178 185 882 241 Normalized tax rate(1) (106 ) (80 ) (444 ) (669 ) Adjusted net income $ 4,752 $ 1,608 $ 13,716 $ 6,796 GAAP net income per diluted share $ 0.40 $ 0.12 $ 1.11 $ 0.42 Adjusted net income per diluted share $ 0.43 $ 0.15 $ 1.24 $ 0.63 Diluted weighted average common shares outstanding 11,115 10,988 11,066 10,844 (1) Applies a normalized tax rate to non-GAAP adjustments, which are pre-tax, based upon the statutory tax rate. 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. View source version on Contacts Christopher J. ThomeVice President - Finance and CFOPhone: (585) 343-2216 Tom CookInvestor Relations(203) Sign in to access your portfolio
Business Wire
8 hours ago
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- Business Wire
Graham Corporation Reports Fourth Quarter and Full-Year Fiscal 2025 Results
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%+ ROIC 1, 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.' 1 Adjusted 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. 2 Orders, 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. Expand Fourth Quarter Fiscal 2025 Performance Review (All comparisons are with the same prior-year period unless noted otherwise.) ($ in thousands except per share data) Q4 FY25 Q4 FY24 $ Change % Change Net sales $ 59,345 $ 49,070 $ 10,275 21% Gross profit $ 16,008 $ 12,694 $ 3,314 26% Gross margin 27.0 % 25.9 % +110 bps Operating profit $ 5,519 $ 1,524 $ 3,995 262% Operating margin 9.3 % 3.1 % +620 bps Net income $ 4,395 $ 1,340 $ 3,055 228% Net income margin 7.4 % 2.7 % +470 bps Net income per diluted share $ 0.40 $ 0.12 $ 0.28 233% Adjusted net income* $ 4,752 $ 1,608 $ 3,144 195% Adjusted net income per diluted share* $ 0.43 $ 0.15 $ 0.28 187% Adjusted EBITDA* $ 7,650 $ 2,955 $ 4,695 159% Adjusted EBITDA margin* 12.9 % 6.0 % +690 bps Expand *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. (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. Expand 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 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, 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. Consolidated Balance Sheets (Amounts in thousands, except per share data) March 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 21,577 $ 16,939 Trade accounts receivable, net of allowances ($630 and $79 at March 31, 2025 and 2024, respectively) 35,507 44,400 Unbilled revenue 38,494 28,015 Inventories 40,025 33,410 Prepaid expenses and other current assets 4,249 3,561 Income taxes receivable 1,520 - Total current assets 141,372 126,325 Property, plant and equipment, net. 50,649 32,080 Prepaid pension asset 5,950 6,396 Operating lease assets 6,386 7,306 Goodwill 25,520 25,520 Customer relationships, net 13,159 14,299 Technology and technical know-how, net 10,310 11,065 Other intangible assets, net 6,858 7,181 Deferred income tax asset 1,502 2,983 Other assets 2,404 724 Total assets $ 264,110 $ 233,879 Liabilities and stockholders' equity Current liabilities: Current portion of finance lease obligations $ 21 $ 20 Accounts payable 27,309 20,788 Accrued compensation 19,161 16,800 Accrued expenses and other current liabilities 4,322 6,666 Customer deposits 84,062 71,987 Operating lease liabilities 1,275 1,237 Income taxes payable - 715 Total current liabilities 136,150 118,213 Finance lease obligations 44 65 Operating lease liabilities 5,514 6,449 Accrued pension and postretirement benefit liabilities 1,192 1,254 Other long-term liabilities 1,633 2,332 Total liabilities 144,533 128,313 Stockholders' equity: Preferred stock, $1.00 par value, 500 shares authorized - - Common stock, $0.10 par value, 25,500 shares authorized, 11,077 and 10,993 shares issued and 10,903 and 10,850 shares outstanding at March 31, 2025 and 2024, respectively 1,107 1,099 Capital in excess of par value 34,616 32,015 Retained earnings 94,229 81,999 Accumulated other comprehensive loss (6,987 ) (7,013 ) Treasury stock (174 and 143 shares at March 31, 2025 and 2024, respectively) (3,388 ) (2,534 ) Total stockholders' equity 119,577 105,566 Total liabilities and stockholders' equity $ 264,110 $ 233,879 Expand Consolidated Statements of Cash Flows (Amounts in thousands) Year Ended March 31, 2025 2024 Operating activities: Net income $ 12,230 $ 4,556 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,718 3,275 Amortization 2,218 2,157 Virgin Orbit and other bad debt reserves 829 95 Amortization of unrecognized prior service cost and actuarial losses 781 843 Amortization of debt issuance costs - 131 Equity-based compensation expense 1,957 1,279 Gain on disposal or sale of property, plant and equipment - (5 ) Change in fair value of contingent consideration (1,215 ) 80 Loss on extinguishment of debt - 726 Deferred income taxes 1,471 (472 ) (Increase) decrease in operating assets, net of acquisitions: Accounts receivable 7,999 (20,724 ) Unbilled revenue (10,595 ) 11,855 Inventories (6,627 ) (6,220 ) Income taxes receivable (2,235 ) 998 Prepaid expenses and other current and non-current assets (2,190 ) (2,199 ) Operating lease assets 1,294 1,212 Prepaid pension asset (234 ) (287 ) Increase (decrease) in operating liabilities, net of acquisitions: Accounts payable 3,491 401 Accrued compensation, accrued expenses and other current and non-current liabilities 639 6,011 Customer deposits 12,090 25,572 Operating lease liabilities (1,272 ) (1,119 ) Long-term portion of accrued compensation, accrued pension liability and accrued postretirement benefits (33 ) (45 ) Net cash provided by operating activities 24,316 28,120 Investing activities: Purchase of property, plant and equipment (18,957 ) (9,226 ) Proceeds from disposal of property, plant and equipment - 44 Acquisition of P3 Technologies, LLC, net of cash acquired (170 ) (6,812 ) Net cash used by investing activities (19,127 ) (15,994 ) Financing activities: Principal repayments on debt - (25,500 ) Proceeds from the issuance of debt - 13,000 Repayments on finance lease obligations (320 ) (316 ) Payment of debt exit costs - (752 ) Payment of debt issuance costs - (241 ) Issuance of common stock 653 476 Purchase of treasury stock (854 ) (58 ) Net cash used by financing activities (521 ) (13,391 ) Effect of exchange rate changes on cash (30 ) (53 ) Net increase (decrease) in cash and cash equivalents 4,638 (1,318 ) Cash and cash equivalents at beginning of year 16,939 18,257 Cash and cash equivalents at end of year $ 21,577 $ 16,939 Expand Adjusted EBITDA Reconciliation (Unaudited, $ in thousands) Three Months Ended Year Ended March 31, March 31, 2025 2024 2025 2024 Net income $ 4,395 $ 1,340 $ 12,230 $ 4,556 Acquisition & integration (income) expense (270 ) 158 (1,170 ) 432 ERC tax credit, net - (702 ) - (702 ) Debt amendment costs - 37 - 781 ERP Implementation costs 178 185 882 241 Net interest (income) expense (141 ) (29 ) (583 ) 248 Income tax expense 1,174 119 3,177 1,018 Equity-based compensation expense 753 277 1,957 1,279 Depreciation & amortization 1,561 1,570 5,936 5,432 Adjusted EBITDA $ 7,650 $ 2,955 $ 22,429 $ 13,285 Net sales $ 59,345 $ 49,070 $ 209,896 $ 185,533 Net income margin 7.4 % 2.7 % 5.8 % 2.5 % Adjusted EBITDA margin 12.9 % 6.0 % 10.7 % 7.2 % Expand Adjusted Net Income and Adjusted Net Income per Diluted Share Reconciliation (Unaudited, $ in thousands, except per share amounts) Three Months Ended Year Ended March 31, March 31, 2025 2024 2025 2024 Net income $ 4,395 $ 1,340 $ 12,230 $ 4,556 Acquisition & integration (income) expense (270 ) 158 (1,170 ) 432 Amortization of intangible assets 555 670 2,218 2,157 ERC tax credit, net - (702 ) - (702 ) Debt amendment costs - 37 - 781 ERP Implementation costs 178 185 882 241 Normalized tax rate (1) (106 ) (80 ) (444 ) (669 ) Adjusted net income $ 4,752 $ 1,608 $ 13,716 $ 6,796 GAAP net income per diluted share $ 0.40 $ 0.12 $ 1.11 $ 0.42 Adjusted net income per diluted share $ 0.43 $ 0.15 $ 1.24 $ 0.63 Diluted weighted average common shares outstanding 11,115 10,988 11,066 10,844 (1) Applies a normalized tax rate to non-GAAP adjustments, which are pre-tax, based upon the statutory tax rate. Expand 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.
