Graham Q1 Earnings Call Highlights

Graham NYSE: GHM reported record fiscal first-quarter 2027 revenue, rising 29% year over year to $71.3 million, as growth in its defense, space, energy and process businesses was supplemented by contributions from FlackTek. Organic revenue increased 17%, while first-quarter orders totaled $96 million and backlog reached a record $557 million. “We are off to a strong start for fiscal 2027,” Chief Financial Officer Chris Thome said, citing broad-based demand, execution and contributions from strategic investments. The company maintained its full-year outlook, including revenue of $285 million to $295 million and adjusted EBITDA of $35 million to $40 million. Defense revenue increased 40% from the prior-year period, driven by the timing of project milestones, new program activity and growth in existing programs. The company received about $61.8 million in new and follow-on defense orders supporting the U.S. Navy’s Columbia-class and Virginia-class submarine programs, as well as the MK48 Mod 7 heavyweight torpedo program. During the quarter, Graham also secured a contract for MK19 Mod 2 air turbine pump assemblies supporting submarine fleet spares. Chief Executive Officer Matt Malone said the MK48 award represented a follow-on option year, while the MK19 work was a competitively won expansion of scope supporting fleet maintenance and spares. Malone said Graham’s newer Navy and X-ray facilities in Batavia are operational, automated welding systems have been commissioned, and assembly and testing capabilities are increasingly supporting production. He said the investments are intended to improve throughput and quality as production requirements rise for Navy platforms. Space revenue rose 86% year over year, reflecting new programs, ramps in existing programs and FlackTek’s contribution. Space orders were $14.4 million, producing a 2.3-times book-to-bill ratio. Thome said the company does not expect that order level every quarter because space orders can be “very lumpy,” but characterized the quarter’s revenue run rate as “the new norm” going forward. The company said development programs have begun moving into production volumes, increasing demand for turbomachinery, cryogenic systems, pumps, motor controllers and precision components. Graham’s liquid nitrogen testing capabilities are now operational, while a cryogenic testing facility in Florida expands its ability to validate more complex products before delivery. FlackTek, acquired by Graham, contributed $6.6 million in first-quarter revenue and approxim...