Graham Corporation (NYSE:GHM), a global business that designs,
manufactures and sells critical equipment for the oil refining,
petrochemical, power and defense industries, today reported its
financial results for its first quarter ended June 30, 2016
(“fiscal 2017”).
Net sales in the first quarter of fiscal 2017 were $22.4
million, compared with net sales of $27.6 million in the first
quarter of the fiscal year ended March 31, 2016 (“fiscal
2016”). Net income in the first quarter was $0.1 million, or
$0.01 per diluted share, compared with $2.4 million, or $0.23 per
diluted share, in the prior year’s first quarter.
Excluding a $0.4 million, net of tax, nonrecurring restructuring
charge recorded in the fiscal 2017 first quarter, adjusted net
income, a non-GAAP number, was $0.5 million or $0.05 per diluted
share. Graham believes that, when used in conjunction with
measures prepared in accordance with U.S. generally accepted
accounting principles (“GAAP”), adjusted net income helps in the
understanding of its operating performance. See the attached
table for additional important disclosures regarding Graham’s use
of adjusted net income as well as a reconciliation of GAAP net
income to non-GAAP adjusted net income.
James R. Lines, Graham’s President and Chief Executive Officer,
commented, “A challenging environment persists in our energy
markets. Our revenue declined considerably compared with the
prior-year period and our gross margin was unfavorably impacted by
project mix, lower volume and a decline in short cycle sales.
We took further steps this quarter to reduce costs, by implementing
a 10% headcount reduction. We believe this recent cost
reduction action will improve near-term operating performance as we
continue to pursue our revenue diversification strategy and other
long-term growth initiatives.”
First Quarter Fiscal 2017 Sales Review(See
accompanying financial tables for a breakdown of sales by industry
and region)
Similar to fiscal 2016, total sales in the first quarter of
fiscal 2017 were impacted by weak market conditions. Sales to
the power market were up 27% to $4.7 million and sales to the
defense and other industrial market were up 10% to $5.3
million. This growth and market diversification was
nonetheless offset by the decline in sales to the refining and
chemical/petrochemical markets. From a geographic
perspective, sales to most markets were down compared with the
prior-year first quarter.
Fluctuations in Graham’s sales among geographic locations and
industries can vary measurably from quarter-to-quarter based on the
timing and magnitude of projects. Graham does not believe
that such quarter-to-quarter fluctuations are indicative of
business trends, which it believes are more apparent on a trailing
twelve month basis.
First Quarter Fiscal 2017 Operating Performance
Review
|
|
|
|
|
|
|
|
|
($ in millions) |
Q1 FY17 |
|
Q1 FY16 |
|
Change |
|
% Change |
|
Gross profit |
$ |
4.1 |
|
|
$ |
8.0 |
|
|
$ |
(3.9 |
) |
|
|
(49 |
%) |
|
Gross
margin |
|
18.4 |
% |
|
|
29.1 |
% |
|
|
|
|
|
Operating (loss) profit
|
$ |
(0.1 |
) |
|
$ |
3.4 |
|
|
$ |
(3.5 |
) |
|
|
(103 |
%) |
|
Operating
margin |
|
-0.4 |
% |
|
|
12.3 |
% |
|
|
|
|
|
Net income |
$ |
0.1 |
|
|
$ |
2.4 |
|
|
$ |
(2.3 |
) |
|
|
(96 |
%) |
|
Diluted
EPS |
$ |
0.01 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter gross profit and margin were impacted by lower
margin orders from backlog, less short cycle sales and reduced
production volume resulting in under-absorption of overhead,
Selling, general and administrative (“SG&A”) expenses
declined 21% to $3.7 million principally due to lower sales
commissions and other variable expenses, including compensation, as
well as cost reductions. SG&A as a percent of sales was
16% in the first quarter of fiscal 2017 compared with 17% in the
same prior-year period.
Given the persistent weakness in the global energy markets, the
Company reduced its headcount by approximately 10% during the first
quarter and incurred a $555,000 restructuring charge in the
quarter. An additional restructuring charge of approximately
$100,000 is expected in the fiscal 2017 second quarter. The
restructuring effort is anticipated to generate approximately $2.7
million of annual cost savings, of which roughly $2.0 million is
expected to be realized in fiscal 2017.
Graham realized a favorable tax credit during the first quarter
of fiscal 2017, resulting in a $0.1 million tax benefit for the
quarter. The effective tax rate for the prior-year quarter
was 32%.
The decline in net income in the first quarter of fiscal 2017
reflects lower revenue, lower gross margin and the restructuring
charge, offset in part by lower SG&A and the favorable tax
credit.
Adjusted EBITDA for the quarter reflects the same factors,
excluding the impact of the restructuring charge:
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
Q1 FY17 |
|
Q1 FY16 |
|
Change |
|
% Change |
|
Adjusted EBITDA |
$ |
1.0 |
|
|
$ |
4.0 |
|
|
$ |
(3.0 |
) |
|
|
(74 |
%) |
|
Adjusted
EBITDA margin |
|
4.6 |
% |
|
|
14.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Graham believes that when used in conjunction with measures
prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”), Adjusted EBITDA (consolidated net income
before interest expense and income, income taxes, depreciation and
amortization and a nonrecurring restructuring charge) and Adjusted
EBITDA margin (Adjusted EBITDA as a percentage of sales), which are
non-GAAP measures, help in the understanding of its operating
performance. Graham’s credit facility also contains ratios
based on EBITDA. See the attached table for additional
important disclosures regarding Graham’s use of Adjusted EBITDA and
Adjusted EBITDA margin as well as a reconciliation of net income to
Adjusted EBITDA.
Cash Flows Remain Steady
Cash, cash equivalents and investments at June 30, 2016 were
$67.7 million, up $2.6 million from the end of fiscal
2016.
Cash provided by operations in the first quarter of fiscal 2017
was $3.8 million, compared with $3.3 million in the first quarter
of fiscal 2016. Improved cash generation was because of
increased customer deposits and lower inventory levels that was
partially offset by lower net income and higher accounts
receivable.
Capital expenditures were $0.1 million in the first quarter
compared with $0.3 million in the same prior-year period. The
Company expects capital expenditures for fiscal 2017 to be between
$2.0 million and $2.5 million. Capital investments are
planned for equipment upgrades and productivity
enhancements.
Dividend payments were $0.9 million for the quarter, modestly
higher than $0.8 million in the prior-year period.
Graham had neither borrowings under its credit facility, nor any
long-term debt outstanding, at June 30, 2016.
First Quarter Fiscal 2017 Backlog Demonstrates Success
of Diversification Strategy
Backlog at quarter end was $99.9 million, down $8.1 million, or
8%, because of the depressed global energy industry.
However, the backlog mix by industry at June 30, 2016, validates
the Company’s market diversification strategy and its expanded
focus to build presence with the U.S Navy and in the power
industry. Backlog by industry was approximately:
- 20% for refinery projects
- 10% for chemical/petrochemical projects
- 16% for power projects, including nuclear
- 50% for U.S. Navy projects
- 4% for other industrial applications
The expected timing for backlog at quarter end to convert to
sales is as follows:
- Within next 12 months:
45% to
50%
- Within 12 to 24 months:
5% to 10%
- Beyond 24 months:
40% to 45%
Orders were likewise affected by continued weakness in the
global energy markets. Orders in the quarter of $14.6 million
were down $9.4 million compared with the prior-year period.
Order activity from the Company’s major markets compared with the
prior-year period was as follows:
- Refining down $3.4 million, or 44%
- Chemical/petrochemical down $3.3 million, or 44%
- Power down $4.1 million, or 62%
- Defense and other industrial up $1.4 million, or 65%
Lower orders from the power industry reflect timing of
projects. Three orders for the refining industry valued at
$6.9 million were on hold as of June 30, 2016.
Orders from U.S. customers were $10.5 million, or 72%, and
orders from international markets were $4.1 million, or 28%.
Graham expects that the balance between domestic and international
orders will continue to be variable between quarters, but that in
the long run orders will be relatively balanced between these
geographic markets.
FY 2017 Revenue and Gross Margin Guidance Remains
Unchanged, Reduced Estimate for SG&A Expenses Reflects Cost
Reductions
Graham’s fiscal 2017 guidance is as follows:
- Revenue anticipated between $80 million and $95
million
- Gross margin expected between 24% and 26%
- SG&A expense expected between $16 million and $17
million
- Effective tax rate anticipated between 30% and 31%
Webcast and Conference Call Graham management
will host a conference call and live webcast today at 11:00 a.m.
Eastern Time to review Graham’s financial condition and operating
results for the fiscal 2017 first quarter, 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 Graham’s website at www.graham-mfg.com under the
heading “Investor Relations.” A question-and-answer session
will follow the formal presentation.
Graham’s conference call can be accessed by calling (201)
689-8560. Alternatively, the webcast can be monitored on
Graham’s website at www.graham-mfg.com under the heading “Investor
Relations.”
A telephonic replay will be available from approximately 2:00
p.m. Eastern Time on the day of the call through Friday August 5,
2016. To listen to the archived call, dial (858) 384-5517,
and enter conference ID number 13640539. A transcript of the
call will be placed on Graham’s website, once available.
ABOUT GRAHAM CORPORATION
Graham is a global business that designs, manufactures and sells
critical equipment for the energy, defense and
chemical/petrochemical industries. Energy markets include oil
refining, cogeneration, nuclear and alternative power. For
the defense industry, the Company’s equipment is used in nuclear
propulsion power systems for the U.S. Navy. Graham’s global
brand is built upon world-renowned engineering expertise in vacuum
and heat transfer technology, responsive and flexible service and
unsurpassed quality. Graham designs and manufactures
custom-engineered ejectors, vacuum pumping systems, surface
condensers and vacuum systems. Graham is also a leading
nuclear code accredited fabrication and specialty machining
company. Graham supplies components used inside reactor
vessels and outside containment vessels of nuclear power
facilities. Graham’s equipment can also be found in other
diverse applications such as metal refining, pulp and paper
processing, water heating, refrigeration, desalination, food
processing, pharmaceutical, heating, ventilating and air
conditioning. Graham’s reach spans the globe and its
equipment is installed in facilities from North and South America
to Europe, Asia, Africa and the Middle East. Graham routinely
posts news and other important information on its website,
www.graham-mfg.com, where additional comprehensive information on
Graham Corporation and its subsidiaries 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,”
“estimates,” “confidence,” “projects,” “typically,” “outlook,”
“anticipates,” “believes,” “appears,” “could,” “opportunities,”
“seeking,” “plans,” “aim,” “pursuit,” 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,
expected expansion and growth opportunities within the domestic and
international markets, anticipated revenue, the timing of
conversion of backlog to sales, market presence, profit margins,
tax rates, foreign sales operations, its ability to improve cost
competitiveness, customer preferences, changes in market conditions
in the industries in which it operates, changes in commodities
prices, the effect on its business of volatility in commodities
prices, changes in general economic conditions and customer
behavior, forecasts regarding the timing and scope of the economic
recovery in its markets, its acquisition and growth strategy and
the expected performance of Energy Steel & Supply Co., 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.
FINANCIAL TABLES FOLLOW.
|
|
Graham Corporation |
|
First Quarter Fiscal 2017 |
|
Consolidated Statements of
Operations—Unaudited |
|
(Amounts in thousands, except per share data) |
|
|
|
|
Three Months Ended |
|
June 30, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
% Change |
|
Net
sales |
$ |
22,365 |
|
|
$ |
27,617 |
|
|
(19 |
%) |
|
Cost of
products sold |
|
18,254 |
|
|
|
19,580 |
|
|
(7 |
%) |
|
Gross
profit |
|
4,111 |
|
|
|
8,037 |
|
|
(49 |
%) |
|
Gross
margin |
|
18.4 |
% |
|
|
29.1 |
% |
|
|
|
|
|
|
|
|
Other expenses and
income: |
|
|
|
|
|
Selling,
general and administrative |
|
3,598 |
|
|
|
4,580 |
|
|
(21 |
%) |
|
Selling,
general and administrative – amortization |
|
58 |
|
|
|
58 |
|
|
0 |
% |
|
Restructuring charge |
|
555 |
|
|
|
- |
|
NA |
|
Operating (loss)
profit |
|
(100 |
) |
|
|
3,399 |
|
NA |
|
Operating margin |
|
(0.4 |
%) |
|
|
12.3 |
% |
|
|
|
|
|
|
|
|
Interest
income |
|
(87 |
) |
|
|
(52 |
) |
|
67 |
% |
|
Interest
expense |
|
2 |
|
|
|
3 |
|
|
(33 |
%) |
|
(Loss) income before
(benefit) provision for income taxes |
|
(15 |
) |
|
|
3,448 |
|
NA |
|
(Benefit) provision for
income taxes |
|
(100 |
) |
|
|
1,087 |
|
NA |
|
Net
income |
$ |
85 |
|
|
$ |
2,361 |
|
|
(96 |
%) |
|
|
|
|
|
|
|
Per share data: |
|
|
|
|
|
Basic: |
|
|
|
|
|
Net
income |
$ |
0.01 |
|
|
$ |
0.23 |
|
|
(96 |
%) |
|
Diluted: |
|
|
|
|
|
Net
income |
$ |
0.01 |
|
|
$ |
0.23 |
|
|
(96 |
%) |
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
Basic |
|
9,675 |
|
|
|
10,148 |
|
|
|
Diluted |
|
9,680 |
|
|
|
10,161 |
|
|
|
|
|
|
|
|
|
Dividends declared per
share |
$ |
0.09 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
Graham Corporation |
|
First Quarter Fiscal 2017 |
|
Consolidated Balance
Sheets—Unaudited |
|
(Amounts in thousands, except per share data) |
|
|
|
|
June 30, |
|
March 31, |
|
|
|
2016 |
|
|
|
2016 |
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$ |
26,705 |
|
|
$ |
24,072 |
|
|
Investments |
|
41,000 |
|
|
|
41,000 |
|
|
Trade
accounts receivable, net of allowances ($48 and $91 at |
|
|
|
|
June 30 and March 31, 2016 and 2015, respectively) |
|
16,184 |
|
|
|
12,730 |
|
|
Unbilled
revenue |
|
13,720 |
|
|
|
11,852 |
|
|
Inventories |
|
7,251 |
|
|
|
10,811 |
|
|
Prepaid
expenses and other current assets |
|
1,408 |
|
|
|
613 |
|
|
Income
taxes receivable |
|
1,869 |
|
|
|
1,652 |
|
|
Total
current assets |
|
108,137 |
|
|
|
102,730 |
|
|
Property, plant and
equipment, net |
|
18,298 |
|
|
|
18,747 |
|
|
Goodwill |
|
6,938 |
|
|
|
6,938 |
|
|
Permits |
|
10,300 |
|
|
|
10,300 |
|
|
Other intangible
assets, net |
|
4,203 |
|
|
|
4,248 |
|
|
Other assets |
|
167 |
|
|
|
168 |
|
|
Total assets |
$ |
148,043 |
|
|
$ |
143,131 |
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Current
portion of capital lease obligations |
$ |
54 |
|
|
$ |
55 |
|
|
Accounts
payable |
|
9,233 |
|
|
|
10,325 |
|
|
Accrued
compensation |
|
4,955 |
|
|
|
5,317 |
|
|
Accrued
expenses and other current liabilities |
|
4,067 |
|
|
|
3,826 |
|
|
Customer
deposits |
|
15,094 |
|
|
|
8,400 |
|
|
Total
current liabilities |
|
33,403 |
|
|
|
27,923 |
|
|
Capital lease
obligations |
|
147 |
|
|
|
157 |
|
|
Accrued
compensation |
|
81 |
|
|
|
- |
|
|
Deferred income tax
liability |
|
3,793 |
|
|
|
3,546 |
|
|
Accrued pension
liability |
|
1,158 |
|
|
|
1,338 |
|
|
Accrued postretirement
benefits |
|
794 |
|
|
|
787 |
|
|
Total liabilities |
|
39,376 |
|
|
|
33,751 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
Preferred
stock, $1.00 par value, 500 shares authorized |
|
- |
|
|
|
- |
|
|
Common
stock, $.10 par value, 25,500 shares authorized |
|
|
|
|
10,537 and 10,468 shares issued and 9,714 and 9,646 |
|
|
|
|
shares outstanding at June 30 and March 31, 2016, |
|
|
|
|
respectively |
|
1,054 |
|
|
|
1,047 |
|
|
Capital
in excess of par value |
|
22,319 |
|
|
|
22,315 |
|
|
Retained
earnings |
|
108,232 |
|
|
|
109,013 |
|
|
Accumulated other comprehensive loss |
|
(10,589 |
) |
|
|
(10,676 |
) |
|
Treasury
stock (823 and 822 shares) |
|
(12,349 |
) |
|
|
(12,319 |
) |
|
Total stockholders’ equity |
|
108,667 |
|
|
|
109,380 |
|
|
Total liabilities and stockholders’ equity |
$ |
148,043 |
|
|
$ |
143,131 |
|
|
|
|
|
|
|
|
|
Graham Corporation |
|
First Quarter Fiscal 2017 |
|
Consolidated Statements of Cash
Flows—Unaudited |
|
(Amounts in thousands) |
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
Operating
activities: |
|
|
|
|
|
Net
income |
|
$ |
85 |
|
|
$ |
2,361 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
Depreciation |
|
|
524 |
|
|
|
563 |
|
|
Amortization |
|
|
58 |
|
|
|
58 |
|
|
Amortization of unrecognized prior service cost and actuarial
losses |
|
|
348 |
|
|
|
303 |
|
|
Stock-based compensation expense |
|
|
42 |
|
|
|
220 |
|
|
Loss on
disposal or sale of property, plant and equipment |
|
|
1 |
|
|
|
- |
|
|
Deferred
income taxes |
|
|
106 |
|
|
|
390 |
|
|
(Increase) decrease in operating assets: |
|
|
|
|
|
Accounts receivable |
|
|
(3,511 |
) |
|
|
1,701 |
|
|
Unbilled revenue |
|
|
(1,868 |
) |
|
|
177 |
|
|
Inventories |
|
|
3,560 |
|
|
|
2,284 |
|
|
Prepaid expenses and other current and non-current
assets |
|
|
(792 |
) |
|
|
(462 |
) |
|
Income taxes payable/receivable |
|
|
(214 |
) |
|
|
361 |
|
|
Prepaid pension asset |
|
|
- |
|
|
|
(305 |
) |
|
Increase
(decrease) in operating liabilities: |
|
|
|
|
|
Accounts payable |
|
|
(1,011 |
) |
|
|
(1,145 |
) |
|
Accrued compensation, accrued expenses and other current and
non-current liabilities |
|
|
(115 |
) |
|
|
(2,284 |
) |
|
Customer deposits |
|
|
6,694 |
|
|
|
(796 |
) |
|
Long-term portion of accrued compensation, accrued pension
liability and accrued postretirement
benefits |
|
|
(93 |
) |
|
|
(95 |
) |
|
Net cash provided by operating
activities |
|
|
3,814 |
|
|
|
3,331 |
|
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
Purchase
of property, plant and equipment |
|
|
(129 |
) |
|
|
(264 |
) |
|
Purchase
of investments |
|
|
(9,000 |
) |
|
|
(9,000 |
) |
|
Redemption of investments at maturity |
|
|
9,000 |
|
|
|
9,000 |
|
|
Net cash used by investing activities |
|
|
(129 |
) |
|
|
(264 |
) |
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
Principal
repayments on capital lease obligations |
|
|
(11 |
) |
|
|
(15 |
) |
|
Issuance
of common stock |
|
|
4 |
|
|
|
96 |
|
|
Dividends
paid |
|
|
(866 |
) |
|
|
(813 |
) |
|
Purchase
of treasury stock |
|
|
(30 |
) |
|
|
- |
|
|
Excess
tax (deficiency) benefit on stock awards |
|
|
(35 |
) |
|
|
12 |
|
|
Net cash used by financing activities |
|
|
(938 |
) |
|
|
(720 |
) |
|
Effect of
exchange rate changes on cash |
|
|
(114 |
) |
|
|
(2 |
) |
|
Net
increase in cash and cash equivalents |
|
|
2,633 |
|
|
|
2,345 |
|
|
Cash and
cash equivalents at beginning of year |
|
|
24,072 |
|
|
|
27,271 |
|
|
Cash and
cash equivalents at end of period |
|
$ |
26,705 |
|
|
$ |
29,616 |
|
|
|
|
|
|
|
|
|
|
Graham Corporation |
|
First Quarter Fiscal 2017 |
|
Adjusted Net Income
Reconciliation—Unaudited |
|
(Amounts in thousands, except per share data) |
|
|
|
|
Three Months Ended |
|
|
June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
Per Diluted Share |
|
|
Per Diluted Share |
|
Net
income |
$ |
85 |
|
$ |
0.01 |
|
|
$ |
2,361 |
|
$ |
0.23 |
|
|
+Restructuring charge |
|
383 |
|
|
0.04 |
|
|
|
- |
|
|
- |
|
|
Adjusted net
income |
$ |
468 |
|
$ |
0.05 |
|
|
$ |
2,361 |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measure:
Adjusted net income is defined as GAAP net income excluding a
nonrecurring restructuring charge. Adjusted net income is not a
measure 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 net income 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. Because Adjusted net income is a non-GAAP
measure and is thus susceptible to varying calculations, Adjusted
net income, as presented, may not be directly comparable to other
similarly titled measures used by other companies.
|
|
Graham Corporation |
|
First Quarter Fiscal 2017 |
|
Adjusted EBITDA
Reconciliation—Unaudited |
|
(Amounts in thousands) |
|
|
|
|
Three Months Ended |
|
|
June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
Net
income |
$ |
85 |
|
|
$ |
2,361 |
|
|
+Net
interest income |
|
(85 |
) |
|
|
(49 |
) |
|
+Income
taxes |
|
(100 |
) |
|
|
1,087 |
|
|
+Depreciation & amortization |
|
582 |
|
|
|
621 |
|
|
+Restructuring charge |
|
555 |
|
|
|
- |
|
|
Adjusted
EBITDA |
$ |
1,037 |
|
|
$ |
4,020 |
|
|
Adjusted
EBITDA margin % |
|
4.6 |
% |
|
|
14.6 |
% |
|
|
|
|
|
|
Non-GAAP Financial Measure:
Adjusted EBITDA is defined as consolidated net income before
interest expense and income, income taxes, depreciation and
amortization and a nonrecurring restructuring charge.
Adjusted EBITDA margin is Adjusted EBITDA divided by 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 are important
for investors and other readers of Graham's financial statements,
as they are used as analytical indicators by Graham's management to
better understand operating performance. Graham’s credit
facility also contains ratios based on 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.
|
|
Graham Corporation |
|
First Quarter Fiscal 2017 |
|
Additional Information—Unaudited |
|
|
|
ORDER & BACKLOG TREND |
|
|
|
|
|
|
|
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q116 |
Q216 |
Q316 |
Q416 |
FY2016 |
Q117 |
|
|
|
|
|
|
Total |
Total |
Total |
Total |
Total |
Total |
|
|
|
|
|
Orders |
$ |
24.0 |
|
$ |
20.6 |
|
$ |
22.3 |
|
$ |
17.1 |
|
$ |
84.0 |
|
$ |
14.6 |
|
|
|
|
|
|
Backlog |
$ |
110.1 |
|
$ |
108.1 |
|
$ |
113.2 |
|
$ |
108.0 |
|
$ |
108.0 |
|
$ |
99.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES BY INDUSTRY FY 2017 |
|
|
|
|
|
|
|
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2017 |
Q1 |
% of |
|
|
|
|
|
|
|
|
|
|
6/30/16 |
Total |
|
|
|
|
|
|
|
|
|
Refining |
$ |
7.2 |
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
Chemical/ Petrochemical |
$ |
5.2 |
|
|
23 |
% |
|
|
|
|
|
|
|
|
|
Power |
$ |
4.7 |
|
|
21 |
% |
|
|
|
|
|
|
|
|
|
Defense and Other Industrial |
$ |
5.3 |
|
|
24 |
% |
|
|
|
|
|
|
|
|
|
Total |
$ |
22.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES BY INDUSTRY FY 2016 |
|
|
|
|
|
|
|
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2016 |
Q1 |
% of |
Q2 |
% of |
Q3 |
% of |
Q4 |
% of |
FY2016 |
% of |
|
|
6/30/15 |
Total |
9/30/15 |
Total |
12/31/15 |
Total |
3/31/16 |
Total |
|
Total |
|
Refining |
$ |
7.8 |
|
|
28 |
% |
$ |
7.2 |
|
|
32 |
% |
$ |
6.2 |
|
|
36 |
% |
$ |
7.8 |
|
|
35 |
% |
$ |
29.0 |
|
|
32 |
% |
|
Chemical/ Petrochemical |
$ |
11.3 |
|
|
41 |
% |
$ |
7.3 |
|
|
32 |
% |
$ |
4.8 |
|
|
28 |
% |
$ |
6.0 |
|
|
27 |
% |
$ |
29.4 |
|
|
33 |
% |
|
Power |
$ |
3.7 |
|
|
13 |
% |
$ |
3.0 |
|
|
13 |
% |
$ |
2.7 |
|
|
16 |
% |
$ |
5.2 |
|
|
23 |
% |
$ |
14.6 |
|
|
16 |
% |
|
Defense and Other Industrial |
$ |
4.8 |
|
|
18 |
% |
$ |
5.3 |
|
|
23 |
% |
$ |
3.6 |
|
|
20 |
% |
$ |
3.3 |
|
|
15 |
% |
$ |
17.0 |
|
|
19 |
% |
|
Total |
$ |
27.6 |
|
|
$ |
22.8 |
|
|
$ |
17.3 |
|
|
$ |
22.3 |
|
|
$ |
90.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES BY REGION FY 2017 |
|
|
|
|
|
|
|
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2017 |
Q1 |
% of |
|
|
|
|
|
|
|
|
|
|
6/30/16 |
Total |
|
|
|
|
|
|
|
|
|
United States |
$ |
16.3 |
|
|
73 |
% |
|
|
|
|
|
|
|
|
|
Middle East |
$ |
1.0 |
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
Asia |
$ |
3.1 |
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
Other |
$ |
2.0 |
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
Total |
$ |
22.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES BY REGION FY 2016 |
|
|
|
|
|
|
|
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2016 |
Q1 |
% of |
Q2 |
% of |
Q3 |
% of |
Q4 |
% of |
FY2016 |
% of |
|
|
6/30/15 |
Total |
9/30/15 |
Total |
12/31/15 |
Total |
3/31/16 |
Total |
|
Total |
|
United States |
$ |
17.6 |
|
|
64 |
% |
$ |
15.2 |
|
|
67 |
% |
$ |
10.8 |
|
|
62 |
% |
$ |
13.4 |
|
|
60 |
% |
$ |
57.0 |
|
|
63 |
% |
|
Middle East |
$ |
3.3 |
|
|
12 |
% |
$ |
3.8 |
|
|
17 |
% |
$ |
1.7 |
|
|
10 |
% |
$ |
2.2 |
|
|
10 |
% |
$ |
11.0 |
|
|
12 |
% |
|
Asia |
$ |
2.9 |
|
|
11 |
% |
$ |
0.8 |
|
|
3 |
% |
$ |
1.6 |
|
|
9 |
% |
$ |
3.6 |
|
|
16 |
% |
$ |
8.9 |
|
|
10 |
% |
|
Other |
$ |
3.8 |
|
|
13 |
% |
$ |
3.0 |
|
|
13 |
% |
$ |
3.2 |
|
|
19 |
% |
$ |
3.1 |
|
|
14 |
% |
$ |
13.1 |
|
|
15 |
% |
|
Total |
$ |
27.6 |
|
|
$ |
22.8 |
|
|
$ |
17.3 |
|
|
$ |
22.3 |
|
|
$ |
90.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information contact:
Jeffrey F. Glajch
Vice President - Finance and CFO
Phone: (585) 343-2216
jglajch@graham-mfg.com
Deborah K. Pawlowski / Karen L. Howard
Kei Advisors LLC
Phone: (716) 843-3908 / (716) 843-3942
dpawlowski@keiadvisors.com / khoward@keiadvisors.com
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