- Five-year strategy advances plans to gain traction in new
markets, increase penetration in existing markets and mature to
full life cycle product business
- Two-prong approach strengthens and redirects legacy heat
transfer and vacuum technology operations and invests in
advancement of new fluid and power technologies business
Graham Corporation (NYSE: GHM), a global leader in the design
and manufacture of mission critical fluid, power, heat transfer and
vacuum technologies for the defense, space, energy and process
industries, announced today its five-year strategic plan that is
expected to drive high single digit revenue growth and low double
digit to mid-teens adjusted EBITDA margins1.
Daniel J. Thoren, President and CEO, commented, “These are
exciting times for Graham as we leverage our business acumen and
operational strengths to build a scalable enterprise with stronger
earnings potential. Our engineering expertise in complex fluid,
power, heat transfer and vacuum systems technologies provides
opportunities to expand our business and reach new customers. We
have successfully transitioned into a diversified business with a
solid defense industry base complemented by our well established
refining and petrochemical industry presence. Importantly, we are
gaining traction in the advanced energy, specifically hydrogen, and
space markets as well.”
Grahams’ strategy takes a two-pronged approach to address the
current status of its two operations, which are at different
business cycle stages. The Batavia operation is focused on
implementing improved processes, enhancing its team with new talent
and increasing engagement to drive productivity, profitability and
growth. To drive improvement, the Company is establishing a new
business system centered on integration, accountability and
transparency.
Mr. Thoren added, “Advancing this strategy for our heat transfer
and vacuum technology business creates many opportunities for
building a stable defense business providing critical equipment to
the U.S. Navy while also rethinking how and where we go to market
with our commercial products for our refining and petrochemical
customers.
“The addition of Barber-Nichols (“BN”) last year was a step
change for Graham, enabling a second prong to our strategy to
enhance that business’s potential to gain greater market share,
expand its product portfolio and address key markets with strong
tailwinds.”
BN had evolved over the last ten years from a custom engineered,
prototype manufacturer to a key provider of highly engineered
solutions of critical equipment for higher volume applications. The
Company believes this has created scalability, greatly improves
margins and enables full product lifecycle support – from original
design and development through aftermarket refurbishment and
repair.
Mr. Thoren concluded, “We see similar potential in our legacy
business to advance to a full product lifecycle model. Combined, we
believe we have the potential to measurably grow over the next five
years and deliver earnings at an even higher rate of growth. We
believe this also establishes our platform and approach for further
acquisitions and expansion in the future.”
Corporate Strategy and Financial Results Webinar
The Company will host a webinar to discuss its corporate
strategy and fourth quarter and fiscal year 2022 financial results
tomorrow, June 9, at 11:00 a.m. Eastern Time. Internet webcast link
and accompanying slide presentations will be available here:
https://ir.grahamcorp.com/.
A question-and-answer session will follow the presentations.
Questions may be submitted through the webinar portal or,
alternatively, a teleconference number will be provided to ask any
questions live at the event.
A webcast replay will be available on the Company’s investor
relations website, where a transcript will also be posted once
available.
Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as
amended.
Forward-looking statements are subject to risks, uncertainties
and assumptions and are identified by words such as “expects,”
“estimates,” “anticipates,” “believes,” “could,” “opportunities,”
“potential,” “plan(s),” ”may,” 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, its ability and
the timing needed to address challenges in its business, including
at the Batavia, NY operations, profitability of future projects,
the development and impact of improved processes, the evolution to
a full life cycle product business, expected expansion and growth
opportunities within its existing and new markets, anticipated
revenue, earnings growth and the rate of such growth, adjusted
EBITDA margins, profit margins, its ability to improve cost
competitiveness and productivity, customer preferences, changes in
market conditions in the industries in which it operates, 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, included under the heading entitled “Risk Factors.”
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.
Forward-Looking Non-GAAP Measures
Forward looking adjusted EBITDA margin is a non-GAAP measures.
The Company is unable to present a quantitative reconciliation of
this forward-looking non-GAAP financial measure to its most
directly comparable forward-looking GAAP financial measure because
such information is not available, and management cannot reliably
predict the necessary components of such GAAP measure 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 reconciliation 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
2023 financial results. This non-GAAP financial measure is a
preliminary estimate and is 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.
ABOUT GRAHAM CORPORATION
Graham is a global leader in the design and manufacture of
mission critical fluid, power, heat transfer and vacuum
technologies for the defense, space, energy and process industries.
The Graham Manufacturing and Barber-Nichols’ global brands are
built upon world-renowned engineering expertise in vacuum and heat
transfer, cryogenic pumps and turbomachinery technologies, as well
as its responsive and flexible service and the unsurpassed quality
customers have come to expect from the Company’s products and
systems.
Graham routinely posts news and other important information on
its website, www.grahamcorp.com, where additional information on
Graham Corporation and its businesses can be found.
1 Forward looking adjusted EBITDA margin is a non-GAAP measure.
See the note regarding forward looking non-GAAP measures at the end
of this release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220608006017/en/
Christopher J. Thome Vice President - Finance and CFO Phone:
(585) 343-2216
Deborah K. Pawlowski Kei Advisors LLC Phone: (716) 843-3908
dpawlowski@keiadvisors.com
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