- Fourth Quarter 2024 Results Demonstrated Ongoing Progress in
Driving Growth and Expanding Margins
- Revenue Grew 14% to $49.1 Million Driven by Strength in Defense
and Aftermarket
- Gross Margin Expanded 930 Basis Points to 25.9% and Achieved
Operating Margin of 3.1% Compared With an Operating Loss in the
Prior-Year Period
- Strengthened Margins Drove Measurably Improved Earnings: Net
Income Was $1.3 Million; Adjusted Net Income1 was $1.6 Million and
Adjusted EBITDA1 was $3.0 Million or 6.0% of Sales
- Fiscal 2024 Results Validate the Effectiveness of Graham’s
Strategic Growth and Profitability Initiatives, Furthering Its
Progress Toward Long-Term Goals
- Sales Growth of 18% Was Largely Organic and Driven by Defense
Projects and Aftermarket Demand
- Gross Margin Expanded 570 Basis Points to 21.9%
- Net Income was $4.6 Million Compared With $0.4 Million in Prior
Fiscal Year; Achieved Adjusted EBITDA1 of $13.3 Million or 7.2% of
Sales
- Paid off Full Debt Balance of $12.5 Million During the
Year
- Received Full Year Orders2 of $268.4 Million, Which Represented
a Book-to-Bill Ratio2 of 1.4x
- Expect Fiscal 2025 Revenue of $200 Million to $210 Million, up
11% at Mid-Point Over Prior Fiscal Year With Adjusted EBITDA3 in
the Range of $16.5 Million to $19.5 Million, up 35% at the
Mid-Point Over Fiscal 2024
Graham Corporation (NYSE: GHM) (“GHM” or the “Company”), a
global leader in the design and manufacture of mission critical
fluid, power, heat transfer and vacuum technologies for the
defense, space, energy, and process industries, today reported
financial results for its fourth quarter and fiscal year ended
March 31, 2024 (“fiscal 2024”). Results for the fiscal year include
approximately five months of operations from the P3 Technologies,
LLC (“P3”) acquisition, which was completed on November 9,
2023.
“Steady execution on our plan set two years ago has brought
significant progress,” commented Daniel J. Thoren, President and
Chief Executive Officer. “Over the past year, we achieved record
revenue and orders, and enhanced profitability and cash flow
management. This enabled continued investments in our operations
and people, the acquisition of P3 Technologies, as well as the
complete repayment of our debt. However, our successes extend
beyond these financial achievements.
“During fiscal 2024, we completed and shipped the remaining two
first article units for the Columbia Class submarine and Ford Class
carrier programs. The Navy expansion at Barber-Nichols has been
successful, resulting in a significant follow-on order to support
the MK48 Mod 7 Heavyweight Torpedo program. Additionally, we
received a $13.5 million strategic investment from a major defense
customer to expand and enhance our Batavia, N.Y. production
capabilities. Furthermore, we acquired P3 Technologies and
successfully integrated it with our Barber-Nichols team.
“Looking ahead, our nearly $400 million of backlog and the
increasing demand from the Navy for accelerated work and expanded
scope make this an exciting time for GHM. We will continue to
strive to engage all partners in improving our business and are
confident in our future growth prospects. Our fiscal 2025 guidance
reflects continued growth and enhancements in margin and
profitability and keeps us on track to hit our fiscal 2027
targets.”
Fourth Quarter Fiscal 2024 Performance Review (All
comparisons are with the same prior-year period unless noted
otherwise.)
($ in thousands except per share data)
Q4 FY24 Q4
FY23 $ Change % Change Net sales
$
49,070
$
43,027
$
6,043
14%
Gross profit
$
12,694
$
7,157
$
5,537
77%
Gross margin
25.9%
16.6%
+930 bps
Operating profit (loss)
$
1,524
$
(352)
$
1,876
NA
Operating margin
3.1%
(0.8%)
NA
Net income (loss)
$
1,340
$
(481)
$
1,821
NA
Net income (loss) margin
2.7%
(1.1%)
NA
Net income per diluted share
$
0.12
$
(0.05)
$
0.17
NA
Adjusted net income*
$
1,608
$
8
$
1,600
NA
Adjusted net income per diluted share*
$
0.15
$
0.00
$
0.15
NA
Adjusted EBITDA*
$
2,955
$
1,453
$
1,502
103%
Adjusted EBITDA margin*
6.0%
3.4%
+260 bps
NA: Not Applicable
*Graham believes that, when used in
conjunction with measures prepared in accordance with U.S.
generally accepted accounting principles, Adjusted EBITDA, adjusted
EBITDA margin, adjusted net income and adjusted diluted net income
per share, which are non-GAAP measures, help in the understanding
of its operating performance. See attached tables and other
information on pages 11 through 13 for important disclosures
regarding Graham’s use of these non-GAAP measures.
Record quarterly net sales of $49.1 million increased 14%, or
$6.0 million, and included $1.2 million of incremental sales from
P3. Sales to the defense market increased $8.2 million, or 43%, and
included a growing aftermarket business reflecting the Company’s
efforts to provide full lifecycle solutions. Total aftermarket
sales, which include those within defense and to the refining and
petrochemical markets, were $9.5 million, up $1.7 million or 22%
from the comparable prior-year period. Revenue from P3 helped to
offset lower revenue in the space market which reflected both
timing of projects and the loss of a customer in April 2023 due to
its bankruptcy. See supplemental data for a further breakdown of
sales by market and region.
Gross margin expanded 930 basis points to 25.9%, which reflected
higher volume and related improved absorption, higher margin
commercial aftermarket sales, P3 margin accretive sales, improved
execution and better pricing on defense contracts.
Selling, general and administrative expense (“SG&A”),
inclusive of amortization, was $11.1 million, or 22.6% of sales,
compared with $7.5 million, or 17.5% of sales for the comparable
prior-year period. The increase reflects higher performance-based
compensation, as well as the supplemental performance bonus for
Barber-Nichols employees in connection with the 2021 acquisition of
Barber-Nichols LLC of $1.4 million. Also contributing to the
increase in SG&A were higher professional fees and enterprise
resource planning (“ERP”) conversion costs at the Batavia
facility.
Full Year Fiscal 2024 Performance Review (All comparisons
are with the same prior-year period unless noted otherwise.)
($ in thousands except per share data)
FY 2024 FY
2023 Change % Change Net sales
$
185,533
$
157,118
$
28,415
18%
Gross profit
$
40,585
$
25,408
$
15,177
60%
Gross margin
21.9%
16.2%
0.0%
+570 bps
Operating profit
$
6,922
$
1,250
$
5,672
454%
Operating margin
3.7%
0.8%
0.0%
+290 bps
Net income (loss)
$
4,556
$
367
$
4,189
NA
Net income (loss) margin
2.5%
0.2%
0.0%
+230 bps
Net income per diluted share
$
0.42
$
0.03
$
0.39
1300%
Adjusted net income*
$
6,796
$
2,519
$
4,277
170%
Adjusted net income per diluted share*
$
0.63
$
0.24
$
0.39
165%
Adjusted EBITDA*
$
13,285
$
8,541
$
4,744
56%
Adjusted EBITDA margin*
7.2%
5.4%
0.0%
+180 bps
NA: Not Applicable
Net sales for fiscal 2024 were a record $185.5 million, up $28.4
million, or 18%, driven by defense sales of $99.5 million, a 52%
increase. Net sales also benefited from a 46% increase in
aftermarket sales to the defense, refining, and petrochemical
markets. The P3 acquisition added $2.2 million of revenue in fiscal
2024. These increases more than offset a 37%, or $7.9 million,
decrease in the space market. See supplemental data for a further
breakdown of sales by market and region.
Gross margin improved 570 basis points, which reflected higher
volume and related improved absorption, favorable mix, and improved
execution and better pricing on defense contracts.
SG&A expense, inclusive of amortization, was $33.6 million,
or 18.1% of sales, compared with $24.2 million, or 15.4% of sales,
for the prior-year period. The increase reflected the BN
supplemental performance bonus of $4.3 million, as well as higher
performance-based compensation given the strong results, P3
acquisition-related costs, increased professional fees, and ERP
conversion costs partially offset by lower bad debt expense as
fiscal 2023 results included the impact of a customer
bankruptcy.
The effective tax rate for fiscal 2024 was 18% compared with 35%
for fiscal 2023 and reflected higher tax credits recognized in
fiscal 2024 for higher income levels and increased investment in
research and development. Also contributing to the change was
discrete tax expense recognized in fiscal 2023 related to the
vesting of restricted stock awards, and a higher mix of income in
higher tax rate foreign jurisdictions in fiscal 2023 compared with
fiscal 2024.
Cash Management and Balance Sheet
Cash provided by operating activities was $28.1 million in
fiscal 2024 compared with $13.9 million in the prior fiscal year.
The increase reflected higher net income along with improved
working capital, which was largely due to changes in payment terms
related to large defense customers and stronger financial
discipline. Cash and cash equivalents on March 31, 2024 were $16.9
million.
Capital expenditures of $9.2 million for fiscal 2024 were
focused on capacity expansion, productivity improvements and the
start of the ERP implementation. Investing activities in fiscal
2024 also included $6.8 million toward the acquisition of P3.
In fiscal 2024, Graham received a $13.5 million strategic
investment from a major defense customer to expand and enhance its
Batavia, N.Y. production capabilities, primarily for machinery and
equipment, in order to support the U.S. Navy's shipbuilding
schedule. The Company expects to break ground on this expansion
project in early fiscal 2025 and will invest an additional
approximately $4 million toward the total estimated project cost of
$18 million. Capital expenditures for fiscal 2025 are expected to
be between $10 million to $15 million of which approximately half
is related to the Batavia facility defense expansion.
In fiscal 2024, the Company paid off $12.5 million of debt and
had zero debt outstanding at March 31, 2024. The Company has access
to a $50 million senior secured revolving credit facility, which
was amended in October 2023 to provide expanded flexibility with
reduced borrowing costs.
Orders, Backlog, and Book-to-Bill Ratio See supplemental
data filed with the Securities and Exchange Commission on Form 8-K
and provided on the Company’s website for a further breakdown of
orders and backlog by market. See “Key Performance Indicators”
below for important disclosures regarding Graham’s use of these
metrics.
($ in millions)
Q1 23 Q2 23 Q3 23
Q4 23 FY23 Q1 24 Q2
24 Q3 24 Q4 24 FY24
Orders
$
40.3
$
91.5
$
20.0
$
50.9
$
202.7
$
67.9
$
36.5
$
123.3
$
40.8
$
268.4
Backlog
$
260.7
$
313.3
$
293.7
$
301.7
$
301.7
$
322.0
$
313.3
$
399.2
$
390.9
$
390.9
Record orders in fiscal 2024 of $268.4 million increased 32%
over fiscal 2023, and were driven primarily by a 52%, or $60.7
million, increase in defense orders. For fiscal 2024, the
book-to-bill ratio was 1.4x.
Backlog of $390.9 million was down 2% sequentially, but up 30%
year-over-year. Approximately 35% to 40% of orders currently in
backlog are expected to be converted to sales in fiscal 2025 and
another 25% to 30% is expected to convert to sales over the
following twelve months. The majority of orders expected to convert
beyond twelve months are for the defense industry, specifically the
U.S. Navy.
Fiscal 2025 Outlook
(as of June 7, 2024)
Fiscal 2025 Guidance
Net Sales:
$200 million to $210 million
Gross Margin:
22% to 23% of sales
SG&A expense(1)
16.5% to 17.5% of sales
Adjusted EBITDA(2)
$16.5 million to $19.5
million
Effective Tax Rate
20% to 22%
Capital Expenditures
$10.0 million to $15.0
million
(1)
Includes approximately $6.5 million to
$7.5 million of BN supplemental performance bonus, equity-based
compensation, and ERP conversion costs included in SG&A
expense.
(2)
Excludes net interest expense, 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.
Webcast and Conference Call
GHM’s management will host a conference call and live webcast
today at 11:00 a.m. Eastern Time (“ET”) to review its financial
condition and operating 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 on the
day of the teleconference through Friday, June 14, 2024. To listen
to the archived call, dial (412) 317-6671 and enter conference ID
number 13745902 or access the webcast replay via the Company’s
website at ir.grahamcorp.com, where a transcript will also be
posted once available.
About Graham Corporation GHM 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 Corporation
routinely posts news and other important information on its
website, grahamcorp.com, where additional information on Graham
Corporation and its businesses can be found.
Safe Harbor Regarding Forward Looking Statements This
news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements are subject to risks, uncertainties
and assumptions and are identified by words such as “expects,”
“future,” “outlook,” “looking ahead,” “anticipates,” “believes,”
“could,” “guidance,” “should,” ”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.
Forward-Looking Non-GAAP Measures Forward-looking
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 2024 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.
FINANCIAL TABLES FOLLOW.
Graham Corporation
Consolidated Statements of
Operations - Unaudited
(Amounts in thousands, except per
share data)
Three Months Ended Year Ended
March 31, March 31,
2024
2023
% Change
2024
2023
% Change
Net sales
$
49,070
$
43,027
14%
$
185,533
$
157,118
18%
Cost of products sold
36,376
35,870
1%
144,948
131,710
10%
Gross profit
12,694
7,157
77%
40,585
25,408
60%
Gross margin
25.9
%
16.6
%
21.9
%
16.2
%
Operating expenses and income:
Selling, general and administrative
10,654
7,235
47%
32,217
23,063
40%
Selling, general and administrative – amortization
436
274
59%
1,366
1,095
25%
Other operating expense
80
-
NA
80
-
NA
Operating profit (loss)
1,524
(352
)
NA
6,922
1,250
454%
Operating margin
3.1
%
(0.8
%)
3.7
%
0.8
%
Loss on extinguishment of debt
-
-
NA
726
-
NA
Other expense (income), net
94
(62
)
NA
374
(250
)
NA
Interest (income) expense, net
(29
)
242
NA
248
939
(74%)
Income (loss) before provision (benefit) for income taxes
1,459
(532
)
NA
5,574
561
894%
Provision (benefit) for income taxes
119
(51
)
NA
1,018
194
425%
Net income (loss)
$
1,340
$
(481
)
NA
$
4,556
$
367
1141%
Per share data:
Basic:
Net income (loss)
$
0.12
$
(0.05
)
NA
$
0.42
$
0.03
1300%
Diluted:
Net income (loss)
$
0.12
$
(0.05
)
NA
$
0.42
$
0.03
1300%
Weighted average common shares
outstanding: Basic
10,844
10,617
10,743
10,614
Diluted
10,988
10,617
10,844
10,654
NA: Not Applicable
Graham Corporation
Consolidated Balance Sheets –
Unaudited
(Amounts in thousands, except per
share data)
March 31,
2024
2023
Assets Current assets: Cash and cash
equivalents
$
16,939
$
18,257
Trade accounts receivable, net of allowances ($79 and $1,841 at
March 31, 2024 and 2023, respectively)
44,400
24,000
Unbilled revenue
28,015
39,684
Inventories
33,410
26,293
Prepaid expenses and other current assets
3,561
1,836
Total current assets
126,325
110,070
Property, plant and equipment, net
32,080
25,523
Prepaid pension asset
6,396
6,107
Operating lease assets
7,306
8,237
Goodwill
25,520
23,523
Customer relationships, net
14,299
10,718
Technology and technical know-how, net
11,065
9,174
Other intangible assets, net
7,181
7,610
Deferred income tax asset
2,983
2,798
Other assets
724
158
Total assets
$
233,879
$
203,918
Liabilities and stockholders’ equity
Current liabilities: Current portion of long-term debt
$
-
$
2,000
Current portion of finance lease obligations
20
29
Accounts payable
20,788
20,222
Accrued compensation
16,800
10,401
Accrued expenses and other current liabilities
6,666
6,434
Customer deposits
71,987
46,042
Operating lease liabilities
1,237
1,022
Income taxes payable
715
16
Total current liabilities
118,213
86,166
Long-term debt
-
9,744
Finance lease obligations
65
85
Operating lease liabilities
6,449
7,498
Accrued pension and postretirement benefit liabilities
1,254
1,342
Other long-term liabilities
2,332
2,150
Total liabilities
128,313
106,985
Stockholders’ equity: Preferred stock,
$1.00 par value, 500 shares authorized
-
-
Common stock, $0.10 par value, 25,500 shares authorized, 10,993 and
10,774 shares issued and 10,850 and 10,635 shares outstanding at
March 31, 2024 and 2023, respectively
1,099
1,075
Capital in excess of par value
32,015
28,061
Retained earnings
81,999
77,443
Accumulated other comprehensive loss
(7,013
)
(7,463
)
Treasury stock (143 and 138 shares at March 31, 2024 and 2023,
respectively)
(2,534
)
(2,183
)
Total stockholders’ equity
105,566
96,933
Total liabilities and stockholders’ equity
$
233,879
$
203,918
Graham Corporation
Consolidated Statements of
Cash Flows – Unaudited
(Amounts in thousands)
Year Ended
March 31,
2024
2023
Operating activities: Net income
$
4,556
$
367
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation
3,275
3,511
Amortization
2,157
2,476
Virgin Orbit reserves
95
3,050
Amortization of unrecognized prior service cost and actuarial
losses
843
672
Amortization of debt issuance costs
131
212
Equity-based compensation expense
1,279
806
Gain on disposal or sale of property, plant and equipment
(5
)
-
Change in fair value of contingent consideration
80
-
Loss on extinguishment of debt
726
-
Deferred income taxes
(472
)
(120
)
(Increase) decrease in operating assets, net of acquisitions:
Accounts receivable
(20,724
)
1,520
Unbilled revenue
11,855
(14,228
)
Inventories
(6,220
)
(9,919
)
Prepaid expenses and other current and non-current assets
(2,199
)
(97
)
Income taxes receivable
998
139
Operating lease assets
1,212
1,206
Prepaid pension asset
(287
)
(651
)
Increase (decrease) in operating liabilities, net of acquisitions:
Accounts payable
401
3,467
Accrued compensation, accrued expenses and other current and
non-current liabilities
6,011
2,654
Customer deposits
25,572
20,526
Operating lease liabilities
(1,119
)
(1,049
)
Long-term portion of accrued compensation, accrued pension
liability and accrued postretirement benefits
(45
)
(628
)
Net cash provided by operating activities
28,120
13,914
Investing activities: Purchase of property, plant and
equipment
(9,226
)
(3,749
)
Proceeds from disposal of property, plant and equipment
44
-
Acquisition of P3 Technologies, LLC, net of cash acquired
(6,812
)
-
Net cash used by investing activities
(15,994
)
(3,749
)
Financing activities: Principal repayments on debt
(25,500
)
(11,000
)
Proceeds from the issuance of debt
13,000
5,000
Payment of debt exit costs
(752
)
-
Principal repayments on finance lease obligations
(29
)
(23
)
Issuance of common stock
476
-
Repayments on lease financing obligations
(287
)
(275
)
Payment of debt issuance costs
(241
)
(122
)
Purchase of treasury stock
(58
)
(21
)
Net cash used by financing activities
(13,391
)
(6,441
)
Effect of exchange rate changes on cash
(53
)
(208
)
Net (decrease) increase in cash and cash equivalents
(1,318
)
3,516
Cash and cash equivalents at beginning of period
18,257
14,741
Cash and cash equivalents at end of period
$
16,939
$
18,257
Graham Corporation
Adjusted EBITDA Reconciliation*
(Unaudited, $ in thousands)
See supplemental data filed with the Securities and Exchange
Commission on Form 8-K and provided on the Company’s website for
additional history of Adjusted EBITDA and Adjusted EBITDA
margin.
(1) Beginning in the fourth quarter of fiscal 2024, Adjusted
EBITDA no longer excludes the Barber-Nichols supplemental
performance bonus, but now excludes the impact of non-cash
equity-based compensation expense in order to be more consistent
with market practice. Prior period results have been adjusted to
reflect these changes on a comparable basis. The Barber-Nichols
supplemental performance bonus expense was $1.4 million and $4.3
million for the fourth quarter and full year of fiscal 2024,
respectively, and $0 for the comparable periods of fiscal 2023 and
will continue through fiscal year 2026.
Three Months Ended
Year Ended
March 31,
March 31,
2024
2023
2024
2023
Net income (loss)
$
1,340
$
(481
)
$
4,556
$
367
Acquisition & integration costs
158
-
432
54
ERC tax credit, net
(702
)
-
(702
)
-
Debt amendment costs
37
-
781
194
ERP Implementation costs
185
-
241
-
Net interest (income) expense
(29
)
242
248
939
Income tax expense (benefit)
119
(51
)
1,018
194
Equity-based compensation expense
277
224
1,279
806
Depreciation & amortization
1,570
1,519
5,432
5,987
Adjusted EBITDA(1)
$
2,955
$
1,453
$
13,285
$
8,541
Net sales
$
49,070
$
43,027
$
185,533
$
157,118
Net income (loss) margin
2.7
%
-1.1
%
2.5
%
0.2
%
Adjusted EBITDA margin
6.0
%
3.4
%
7.2
%
5.4
%
Adjusted Net Income and Adjusted Net
Income per Diluted Share Reconciliation* (Unaudited, $ in
thousands, except per share amounts)
See supplemental data filed with the Securities and Exchange
Commission on Form 8-K and provided on the Company’s website for
additional history of Adjusted Net Income and Adjusted Net Income
per Diluted Share.
(1) Applies a normalized tax rate to non-GAAP adjustments, which
are pre-tax, based upon the statutory tax rate. (2) Beginning in
the fourth quarter of fiscal 2024, Adjusted Net Income no longer
excludes the Barber-Nichols supplemental performance bonus. Prior
period results have been adjusted to reflect this change on a
comparable basis. The Barber-Nichols supplemental performance bonus
expense, net-of-tax, was $1.1 million and $3.3 million for the
fourth quarter and full year of fiscal 2024, respectively, and $0
for the comparable periods of fiscal 2023 and will continue through
fiscal year 2026.
Three Months Ended
Year Ended
March 31,
March 31,
2024
2023
2024
2023
Net income (loss)
$
1,340
$
(481
)
$
4,556
$
367
Acquisition & integration costs
158
-
432
54
Amortization of intangible assets
670
619
2,157
2,476
ERC tax credit, net
(702
)
-
(702
)
-
Debt amendment costs
37
-
781
194
ERP Implementation costs
185
-
241
-
Normalized tax rate(1)
(80
)
(130
)
(669
)
(572
)
Adjusted net income(2)
$
1,608
$
8
$
6,796
$
2,519
GAAP net income (loss) per diluted share
$
0.12
$
(0.05
)
$
0.42
$
0.03
Adjusted net income per diluted share(2)
$
0.15
$
0.00
$
0.63
$
0.24
Diluted weighted average common shares outstanding
10,988
10,617
10,844
10,654
* Acquisition and Integration Costs are incremental costs
that are directly related to the BN and P3 acquisitions. These
costs may include, among other things, professional, consulting and
other fees, system integration costs, and fair value adjustments
relating to contingent consideration. Debt Amendment Costs consists
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. The Employee
Retention Tax Credit (“ERC”) reflects payroll tax amounts expected
to be recovered due to COVID-19 relief programs and is not expected
to recur in the future. ERP Implementation Costs relate to
consulting costs incurred in connection with the new ERP system
being implemented throughout our Batavia, N.Y. facility and are not
expected to recur once the project is completed.
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.
__________________________________ 1 Adjusted Net Income,
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures.
See attached tables and other information on pages 11 through 13
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. 3
Forward-looking Adjusted EBITDA is a non-GAAP measure. See
‘Forward-Looking Non-GAAP Measures’ on page 6 for important
disclosures regarding Graham’s use of this non-GAAP measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240607790041/en/
Christopher J. Thome Vice President - Finance and CFO (585)
343-2216
Deborah K. Pawlowski Kei Advisors LLC (716) 843-3908
dpawlowski@keiadvisors.com
Graham (NYSE:GHM)
過去 株価チャート
から 5 2024 まで 6 2024
Graham (NYSE:GHM)
過去 株価チャート
から 6 2023 まで 6 2024
