1. GHM reported a strong fourth quarter with 21% sales growth. 2. Defense market sales grew by 28%, enhancing overall profitability. 3. Management transition planned for June 2025, ensuring continuity. 4. GHM's backlog is strong, with $412.3 million, primarily in Defense. 5. Fiscal 2026 outlook shows momentum despite potential tariff impacts.
Strong sales and backlog indicate ongoing demand, similar to past growth patterns.
Strong quarterly results and management transition likely to influence investor confidence significantly.
Sustained growth in defense contracts and market strategies suggest long-term benefits.
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%+ 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. |
*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.