Graham Corporation, a global leader in fluid, power, heat transfer, and vacuum technology solutions for defense, space, energy, and process industries, reported record financial results for its second quarter, ending March 31, 2025. These results include contributions from the recent P3 Technologies acquisition, which closed in November 2023.
President and CEO Daniel J. Thoren credited the company’s diversification strategy and focus on high-margin opportunities, noting, “Our team’s efforts have driven substantial margin expansion and strong sales growth in our core markets.” Thoren also highlighted ongoing initiatives to enhance supply chain resilience, support talent retention, and strengthen the balance sheet, all of which position the company for sustained growth and profitability.
Key Financial Highlights for Q2 Fiscal 2025:
- Net Sales: Achieved record $53.6 million, up 19% year-over-year.
- Gross Profit: Rose 78% to $12.8 million, driven by higher volumes, improved pricing, and a focus on high-margin projects.
- Operating Profit: Surged by 427% to $4.2 million, with an operating margin of 7.9%.
- Net Income: Increased to $3.3 million from $411,000 in Q2 FY24, with net income per diluted share up 650%.
- Adjusted EBITDA: Gained 150% to $5.6 million, with an adjusted EBITDA margin of 10.5%.
The company’s defense market sales rose by $5.8 million, fueled by new and expanded programs, while higher refining and chemical/petrochemical sales added $2.2 million. Despite a minor dip in aftermarket sales, gross margin improved by 790 basis points to 23.9%, benefiting from favorable project mix, a grant from the BlueForge Alliance, and cost efficiencies.
Operational Investments and Cash Management
For the first half of fiscal 2025, Graham invested $6.5 million in capacity and productivity improvements, increasing its annual capital expenditure forecast to support future growth. As of September 30, 2024, cash and cash equivalents totaled $32.3 million, up from $16.9 million at the end of fiscal 2024, with no outstanding debt.
Orders, Backlog, and FY25 Outlook
Orders for the quarter totaled $63.7 million, reflecting strong demand across defense, space, and refining sectors. Backlog reached a record $407 million, up 30% year-over-year, with substantial portions expected to convert to sales over the next two years.
For FY25, Graham raised its adjusted EBITDA guidance to $18.0 million to $21.0 million, reaffirmed revenue expectations of $200 million to $210 million, and updated its gross margin outlook to 23%-24%.
Conference Call and Webcast
Graham’s management will host a webcast on November 8, 2024, at 11:00 a.m. ET to discuss the results, strategy, and outlook, followed by a Q&A session. A replay will be available until November 15, 2024, via Graham’s investor relations website.
