- Q4 revenue of $23.1 million reflected approximately $7
million in delayed revenue as a result of the COVID-19 global
pandemic
- Q4 EPS was $0.06; fiscal year 2020 EPS was $0.19
- High quality backlog of $112 million at end of year; Defense
industry comprises 52% of backlog
- Strong balance sheet provides ample liquidity with cash
balance of $73 million at March 31, 2020
Graham Corporation (NYSE:GHM), a global business that designs,
manufactures and sells critical equipment for the oil refining,
petrochemical and defense industries, today reported financial
results for the fourth quarter and year ended March 31, 2020
(“fiscal 2020”). Financial results include the financial
performance of the Company’s commercial nuclear utility business,
Energy Steel, until its divestiture on June 24, 2019 (“the divested
business”).
James R. Lines, Graham’s President and Chief Executive Officer,
commented, “The COVID-19 global pandemic had a sudden and severe
impact on our operations, our customers and our markets and
continues to impact demand for our products. Our actions in
response to this unparalleled crisis have been driven by our
values. We believe that we must protect the health and welfare of
our employees, support our community to reduce the spread of the
virus, prudently and safely support our customers as a critical
infrastructure and defense industry supplier, and stay committed to
our longer term strategy for earnings expansion. Out of caution, we
had reduced production to approximately 10% of capacity during the
latter half of March and first half of April. As we have been
ramping our production operations back up to normal levels, we have
instituted strict safety and health protocols. We expect to be at
approximately 90% of full capacity in June and believe we will
average about 50% of production capacity for the first quarter of
fiscal 2021. This event had a sudden and severe impact on our
fourth quarter, and first quarter of fiscal 2021 leaves us with an
uncertain outlook. However, our strong balance sheet, and market
positions in navy/defense and energy and chemical will help us
weather this crisis and we expect to emerge in an even stronger
position.”
He continued, “Prior to the pandemic, our energy and
petrochemical markets had already begun to slow. The onset of the
COVID-19 pandemic, the resulting significant decline in economic
activity, and the international imbalance of crude oil supply and
demand, have had an immediate and oversized impact on the energy
industry. As a late cycle business, we believe that our backlog
will provide us with some cushion as our markets find direction and
our customers evaluate projects. Currently, our customers are
preserving cash and reducing capital budgets, projects are being
delayed and there is significant uncertainty regarding the near-
and mid-term outlook. The combined effect is great hesitation by
our customers, which is impacting our project pipeline and orders.
We believe we are fortunate to have a strong backlog to deliver
near-term results. For the longer term, as global economic recovery
and expansion develops following the pandemic, we believe that our
financial strength, our reputation and our superior customer
service will help position us to be at a competitive advantage in
our markets, especially as we work to continue to expand our
addressable opportunities to serve the defense industry and further
leverage our installed commercial base.”
Fourth Quarter Fiscal 2020 Sales Summary
(See accompanying financial tables for a breakdown of sales by
industry and region)
Net sales in the fourth quarter of fiscal 2020 were $23.1
million compared with $23.6 million in the fourth quarter of the
fiscal year 2019 (“fiscal 2019”). Revenue in the fiscal 2020 fourth
quarter was negatively impacted by a delay of approximately $7
million in revenue as a result of the COVID-19 pandemic. This
included a customer delay for an approximate $5 million order in
China and approximately $2 million in revenue delayed due to the
limitation in production at the Batavia, NY facility. The total $7
million of revenue delayed due to COVID-19 is expected to be
realized in fiscal 2021, which ends March 31, 2021. The fourth
quarter of fiscal 2019 included $1.7 million of sales from the
divested business.
Sales to the refining market were down $2.2 million to $7.4
million, while sales to the chemical/petrochemical market were down
$0.3 million to $7.1 million while sales to the other commercial,
industrial and defense markets were up $3.4 million to $8.0
million.
From a geographic perspective, the mix of domestic and
international sales shifted somewhat in the fourth quarter of
fiscal 2020. Domestic sales were 63% of total sales compared with
70% in the fourth quarter of fiscal 2019. International sales were
37% of total sales, compared with 30% in the prior-year period.
Fluctuations in Graham’s sales among geographic locations and
industries can vary measurably from quarter-to-quarter based on the
timing and magnitude of projects. Graham does not believe that such
quarter-to-quarter fluctuations are indicative of business trends,
which it believes are more apparent on a trailing twelve month
basis.
Fourth Quarter Fiscal 2020 Performance Review
($ in millions except per share data)
Q4 FY20
Q4 FY19
Change
Net sales
$
23.1
$
23.6
$
(0.5)
Gross profit
$
4.4
$
4.8
$
(0.4)
Gross margin
19.2%
20.3%
Operating profit (loss)
$
0.3
$
(5.8)
$
6.1
Operating margin
1.4%
(24.7%)
Net income
$
0.6
$
(4.6)
$
5.2
Diluted EPS
$
0.06
$
(0.46)
Adjusted EBITDA
$
0.9
$
1.4
$
(0.5)
Adjusted EBITDA margin
3.9%
5.8%
Gross margin in the fourth quarter was 19.2% compared with 20.3%
for fourth quarter fiscal 2019. The decrease in gross margin was
due to the impact the COVID-19 pandemic had on volume combined with
a higher cost structure due to investments made for growth
initiatives.
Selling, general and administrative (“SG&A”) expenses,
excluding amortization, were down $0.1 million, or 2%, to $4.0
million in the fourth quarter of fiscal 2020. The prior-year
quarter included $0.3 million for the divested business. SG&A,
excluding amortization, as a percent of sales was unchanged at
17%.
Fourth quarter fiscal 2020 operating profit was $0.3 million.
Net income and earnings per share for the fiscal 2020 fourth
quarter were $0.6 million and $0.06, respectively, compared with a
net loss of $4.6 million, or a $0.46 loss per diluted share in the
prior year. The fiscal 2019 fourth quarter included a $6.4 million
impairment charge, or $5.3 million net of tax which resulted in an
operating loss of $5.8 million and net loss of $4.6 million.
Fiscal 2020’s fourth quarter adjusted EBITDA was unfavorably
impacted by lower gross margins primarily due to the impact of the
COVID-19 pandemic’s effect on customers, end markets and Graham’s
business operations, when compared with the prior-year fourth
quarter.
Graham believes that adjusted EBITDA (defined as consolidated
net income before net interest income, income taxes, depreciation,
goodwill and other impairments, and amortization), and adjusted
EBITDA margin (adjusted EBITDA as a percentage of sales), which are
non-GAAP measures, help in the understanding of its operating
performance. Moreover, Graham’s credit facility also contains
ratios based on EBITDA. See the attached table on page 10 for
additional important disclosures regarding Graham’s use of adjusted
EBITDA and adjusted EBITDA margin as well as the reconciliation of
net income to adjusted EBITDA.
Full Year Fiscal 2020 Performance Review
($ in millions except per share data)
FY20
FY19
Change
Net sales
$
90.6
$
91.8
$
(1.2)
Gross profit
$
18.1
$
21.9
$
(3.8)
Gross margin
20.0%
23.9%
Operating profit (loss)
$
0.7
$
(2.4)
$
3.1
Operating margin
0.7%
(2.6%)
Net income
$
1.9
$
(0.3)
$
2.2
Diluted EPS
$
0.19
$
(0.03)
$
0.22
Adjusted EBITDA
$
3.0
$
7.1
$
(4.1)
Adjusted EBITDA margin
3.3%
7.7%
Net sales for fiscal 2020 were $90.6 million, down 1.3% compared
with $91.8 million in fiscal 2019. Sales in fiscal 2020 were down
unfavorably impacted by the $7 million in revenue delayed due to
the COVID-19 pandemic. Fiscal 2020 included $1.3 million in revenue
related to the divested business, while fiscal 2019 included $8.3
million.
Domestic sales in fiscal 2020 were relatively unchanged at 64%
of total sales, compared 65% in fiscal 2019. Likewise,
international sales were 36% and 35% of total sales in fiscal 2020
and fiscal 2019, respectively.
Gross margin declined 3.9 points compared with fiscal 2019.
Jeffrey F. Glajch, Graham’s Vice President – Finance and Chief
Financial Officer, commented, “Our lower gross margin reflects
investments made to position Graham for the strong growth
originally anticipated for fiscal 2021. The pandemic clearly has
altered our expectations for the year. We are evaluating actions
that may become necessary as we get a better understanding of what
we can expect in fiscal 2021 and fiscal 2022.”
SG&A in fiscal 2020 was $16.9 million, down 6%, or $1.0
million. Included in fiscal 2019 was $1.4 million related to the
divested business. Somewhat offsetting the reduction were
investments in sales initiatives. As a percent of sales, SG&A,
excluding amortization, was 18.6%, compared with 19.2% in fiscal
2019.
Fiscal 2020 net income was $1.9 million, or $0.19 per diluted
share. Net loss in fiscal 2019 was $0.3 million, or a loss of $0.03
per diluted share, which included the $5.3 million net of tax
impairment charge related to the divested business. Fiscal 2020 net
income and EBITDA were unfavorably impacted by lower gross margin
for the reasons noted above. See the attached table on page 10 for
additional important disclosures regarding Graham’s use of adjusted
EBITDA and adjusted EBITDA margin as well as the reconciliation of
net income to adjusted EBITDA.
Strong Balance Sheet with Ample Liquidity
Cash, cash equivalents and investments at March 31, 2020 were
$73.0 million, compared with $77.8 million at March 31, 2019.
Cash provided by operations in fiscal 2020 was $1.2 million,
compared with cash provided by operations of $7.9 million in fiscal
2019. The $6.7 million decrease was primarily due to cash usage
from customer deposits and unbilled revenue.
Capital spending in fiscal 2020 was $2.4 million, compared with
$2.1 million in fiscal 2019. The Company expects capital
expenditures for fiscal 2021 to be between $2.0 million and $2.5
million, of which 80% to 85% is expected to be for machinery and
equipment and the remainder to be used for other items.
Dividend payments were $4.3 million and $3.8 million in fiscal
2020 and fiscal 2019, respectively.
Graham had no debt at March 31, 2020, $13.3 million of
outstanding letters of credit and approximately $21.7 million of
availability on its lines of credit.
Orders and Backlog
For the fourth quarter of fiscal 2020, orders decreased $9.3
million to $12.3 million as the COVID-19 pandemic caused economic
uncertainty for projects in the Company’s commercial markets and
heavily impacted the energy industry. Orders in the prior-year
quarter included $3.3 million in the divested business.
The primary driver of the decline in orders during the fourth
quarter of fiscal 2020 compared with 2019 was an $8.4 million
decrease in refining orders. This was partially offset by a $2.6
million increase in chemical and petrochemical orders compared with
the prior year.
Domestic orders were 46% of total net orders in the fourth
quarter of fiscal 2020 and were 51% in the prior-year period.
For fiscal 2020, orders were down 21% to $80.0 million, compared
with $101.2 million in fiscal 2019. Orders related to the divested
business were $3.0 million in fiscal 2020 and $11.0 million in
fiscal 2019.
The $1.0 million increase in orders from other commercial,
industrial and defense markets was offset by the $1.8 million and
$12.1 million decline in orders from the global refining industry
and the chemical/petrochemical industry, respectively. Orders in
fiscal 2019 included $11.0 million for the divested business.
Domestic orders were 54% and international orders were 46% of
total net orders in fiscal 2020. This compared with domestic orders
of 61% and international orders of 39% of total net orders in
fiscal 2019. Domestic orders decreased by $19.2 million, or 31%,
and net international orders decreased by $2.0 million, or 5% in
fiscal 2020.
Backlog at the end of fiscal 2020 was $112.4 million, compared
with $132.1 million at the end of fiscal 2019. The decline reflects
lower orders in the fourth quarter as a result of reduced capital
spending in the global energy and petrochemical markets resulting
from the COVID-19 pandemic’s impact on global markets.
Backlog by industry at March 31, 2020 was approximately:
- 52% for U.S. Navy projects
- 27% for refinery projects
- 17% for chemical/petrochemical projects
- 4% for other industrial applications
The Company expects 70% to 75% of its backlog to convert to
sales within the next 12 months.
Fiscal 2021 Outlook
Due to the significant economic impact of the COVID-19 pandemic
on the energy and petrochemical/chemical markets and the lack of
visibility as to the duration or the ultimate impact of the
pandemic, the Company is not providing guidance for fiscal 2021 at
this time.
Mr. Lines concluded, “With our manufacturing production impeded
in the first quarter of fiscal 2021, we expect that revenue,
earnings and cash generation will likewise be challenged. We plan
to return to more normal production levels in June and begin
working through our backlog, which will help the results from
operations for the remaining quarters of fiscal 2021. We expect to
convert 70-75% of our $112.4 million March 31, 2020 backlog during
the year. However, it is important to note that we have had
approximately $3.2 million of orders canceled in the fourth quarter
and three orders delayed due to the COVID-19 pandemic, causing
revenue of $4.1 million to be delayed beyond fiscal 2021. The
customer requests for the delays were both in the fourth quarter as
well as thus far in the first quarter of fiscal 2021. As a result,
we are cautious on our outlook until we have more clarity on the
potential for future demand. Encouragingly, we are nearing a steady
state of annual revenue from the defense industry with the products
we provide for the U.S. Navy. We expect this to reach a level of
$20 million to $25 million per year for several years as we replace
backlog with new projects over time. Additionally, given our
financial strength, we intend to be opportunistic in regards to
acquisition opportunities that may occur due to market
consolidation and contraction.”
Webcast and Conference Call
Graham’s management will host a conference call and live webcast
today at 11:00 a.m. Eastern Time to review its financial condition
and operating results for the fourth quarter and full year fiscal
2020, 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 2:00 p.m. ET today
through Wednesday, June 17, 2020. To listen to the archived call,
dial (412) 317-6671 and enter conference ID number 13700698. 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, 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’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,” “look towards” 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,
effects of the COVID-19 global pandemic, expected expansion and
growth opportunities within its 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 and
productivity, customer preferences, changes in market conditions in
the industries in which it operates, the effect on its business of
volatility in commodities prices, including, but not limited to,
the extreme price volatility seen in the first six months of
calendar year 2020, 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 its operations in China, India and other international
locations, 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
Fourth Quarter Fiscal
2020
Consolidated Statements of
Income - Unaudited
(Amounts in thousands, except per
share data)
Three Months Ended
Year Ended March 31, March
31,
2020
2019
% Change
2020
2019
% Change
Net sales
$
23,082
$
23,641
(2%)
$
90,604
$
91,831
(1%)
Cost of products sold
18,640
18,843
(1%)
72,456
69,922
4%
Gross profit
4,442
4,798
(7%)
18,148
21,909
(17%)
Gross margin
19.2
%
20.3
%
20.0
%
23.9
%
Other expenses and income:
Selling, general and administrative
4,024
4,123
(2%)
16,868
17,641
(4%)
Selling, general and administrative – amortization
-
59
NA
11
237
(95%)
Goodwill and other impairments
-
6,449
NA
-
6,449
NA
Other expense
94
-
NA
617
-
NA
Operating (loss) profit
324
(5,833
)
NA
652
(2,418
)
NA
Operating margin
1.4
%
(24.7
%)
0.7
%
(2.6
%)
Other income
(87
)
(205
)
(58%)
(348
)
(823
)
(58%)
Interest income
(244
)
(418
)
(42%)
(1,324
)
(1,462
)
(9%)
Interest expense
3
4
(25%)
12
12
0%
Income (Loss) before provision (benefit) for income taxes
652
(5,214
)
NA
2,312
(145
)
NA
Provision (Benefit) for income taxes
76
(661
)
NA
440
163
170%
Net income (loss)
$
576
$
(4,553
)
NA
$
1,872
$
(308
)
NA
Per share data:
Basic:
Net income
$
0.06
$
(0.46
)
NA
$
0.19
$
(0.03
)
NA
Diluted:
Net income
$
0.06
$
(0.46
)
NA
$
0.19
$
(0.03
)
NA
Weighted average common shares outstanding:
Basic
9,888
9,837
9,876
9,823
Diluted
9,888
9,837
9,879
9,823
Dividends declared per share
$
0.11
$
0.10
$
0.43
$
0.39
N/A: Not Applicable
Graham Corporation
Fourth Quarter Fiscal
2020
Consolidated Balance Sheets -
Unaudited
(Amounts in thousands, except per
share data)
March 31,
2020
2019
Assets Current assets: Cash and
cash equivalents
$
32,955
$
15,021
Investments
40,048
62,732
Trade accounts receivable, net of allowances ($33 at each of
March 31, 2020 and 2019)
15,400
17,582
Unbilled revenue
14,592
7,522
Inventories
22,291
24,670
Prepaid expenses and other current assets
906
1,333
Income taxes receivable
485
1,073
Assets held for sale
-
4,850
Total current assets
126,677
134,783
Property, plant and equipment, net
17,587
17,071
Prepaid pension asset
3,460
4,267
Operating lease assets
243
-
Other assets
153
149
Total assets
$
148,120
$
156,270
Liabilities and stockholders’ equity
Current liabilities: Current portion of
finance lease obligations
$
40
$
51
Accounts payable
14,253
12,405
Accrued compensation
4,453
5,126
Accrued expenses and other current liabilities
3,352
2,933
Customer deposits
26,983
30,847
Operating lease liabilities
153
-
Liabilities held for sale
-
3,525
Total current liabilities
49,234
54,887
Finance lease obligations
55
95
Operating lease liabilities
82
-
Deferred income tax liability
721
1,056
Accrued pension liability
747
662
Accrued postretirement benefits
557
604
Total liabilities
51,396
57,304
Commitments and contingencies
Stockholders’
equity: Preferred stock, $1.00 par value, 500
shares authorized Common stock, $.10 par value,
25,500 shares authorized; 10,689 and 10,650 shares
issued and 9,881 and 9,843 shares outstanding at
March 31, 2020 and 2019, respectively
1,069
1,065
Capital in excess of par value
26,361
25,277
Retained earnings
91,389
93,847
Accumulated other comprehensive loss
(9,556
)
(8,833
)
Treasury stock (808 and 807 shares at March 31, 2020 and 2019
respectively)
(12,539
)
(12,390
)
Total stockholders’ equity
96,724
98,966
Total liabilities and stockholders’ equity
$
148,120
$
156,270
Graham Corporation
Fourth Quarter Fiscal
2020
Consolidated Statements of
Cash Flows – Unaudited
(Amounts in thousands)
Year Ended March 31,
2020
2019
Operating activities:
Net income (loss)
$
1,872
$
(308
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation
1,957
1,968
Amortization
11
237
Amortization of unrecognized prior service cost and actuarial
losses
997
875
Goodwill and other impairments.
-
6,449
Equity-based compensation expense
975
1,069
(Gain) loss on disposal or sale of property, plant and equipment
(1
)
30
Loss on sale of Energy Steel & Supply Co.
181
-
Deferred income taxes
(287
)
(159
)
(Increase) decrease in operating assets:
Accounts receivable
2,044
(1,227
)
Unbilled revenue
(7,070
)
(2,519
)
Inventories
2,279
(2,068
)
Income taxes receivable/payable
588
396
Prepaid expenses and other current and non-current assets
358
(576
)
Operating lease assets
214
-
Prepaid pension asset
(871
)
(1,181
)
Increase (decrease) in operating liabilities:
Accounts payable
1,826
(2,572
)
Accrued compensation, accrued expenses and other current and
non-current liabilities
(52
)
1,118
Customer deposits
(3,683
)
6,328
Operating lease liabilities
(140
)
-
Long-term portion of accrued compensation, accrued pension
liability and accrued postretirement benefits
41
57
Net cash provided by operating activities
1,239
7,917
Investing activities:
Purchase of property,
plant and equipment
(2,417
)
(2,138
)
Proceeds from disposal of property, plant and equipment
12
-
Proceeds from the sale of Energy Steel & Supply Co.
602
-
Purchase of investments
(181,462
)
(115,342
)
Redemption of investments at maturity
204,146
88,633
Net cash provided (used) by investing activities
20,881
(28,847
)
Financing activities:
Principal repayments on
finance lease obligations
(51
)
(97
)
Issuance of common stock
24
307
Dividends paid
(4,250
)
(3,834
)
Purchase of treasury stock
(230
)
(146
)
Excess tax (deficiency) benefit on stock awards
-
-
Net cash used by financing activities
(4,507
)
(3,770
)
Effect of exchange rate changes on cash
(231
)
(183
)
Net (decrease) increase in cash and cash equivalents, including
cash classified within current assets held for
sale
17,382
(24,883
)
Net decrease (increase) in cash classified within current assets
held for sale
552
(552
)
Net increase (decrease) in cash and cash equivalents
17,934
(25,435
)
Cash and cash equivalents at beginning of year
15,021
40,456
Cash and cash equivalents at end of year
$
32,955
$
15,021
Graham Corporation
Fourth Quarter Fiscal
2020
Adjusted EBITDA Reconciliation
- Unaudited
(Amounts in thousands)
Three Months Ended
Year Ended March 31,
March 31,
2020
2019
2020
2019
Net income
$
576
$
(4,553
)
$
1,872
$
(308
)
+ Net interest income
(241
)
(414
)
(1,312
)
(1,450
)
+ Income taxes
76
(661
)
440
163
+ Depreciation & amortization
489
558
1,968
2,205
+ Goodwill and other impairments
-
6,449
-
6,449
Adjusted EBITDA
$
900
$
1,379
$
2,968
$
7,059
Adjusted EBITDA margin %
3.9
%
5.8
%
3.3
%
7.7
%
Non-GAAP Financial Measure:
Adjusted EBITDA is defined as consolidated net income before net
interest income, income taxes, depreciation, amortization and
goodwill and other impairments and 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, 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
EBITDA. Because adjusted EBITDA is a non-GAAP measure and is thus
susceptible to varying calculations, adjusted EBITDA, as presented,
may not be directly comparable to other similarly titled measures
used by other companies.
Graham Corporation
Fourth Quarter Fiscal
2020
Additional Information –
Unaudited
ORDER & BACKLOG TREND
($ in millions)
Q119
Q219
Q319
Q419
FY2019
Q120
Q220
Q320
Q420
FY2020
Total
Total
Total
Total
Total
Total
Total
Total
Total
Total
Orders
$
22.0
$
34.4
$
23.2
$
21.6
$
101.2
$
15.1
$
32.6
$
20.0
$
12.3
$
80.0
Backlog
$
114.9
$
127.8
$
133.7
$
132.1
$
132.1
$
117.2
$
127.8
$
122.9
$
112.4
$
112.4
SALES BY INDUSTRY FY 2020
($ in millions)
FY 2020
Q1
% of
Q2
% of
Q3
% of
Q4
% of
FY2020
% of
6/30/19
Total
9/30/19
Total
12/31/19
Total
3/31/20
Total
Total
Refining
$
7.5
36%
$
6.3
29%
$
12.2
49%
$
7.4
32%
$
33.4
37%
Chemical/ Petrochemical
$
7.1
35%
$
10.5
48%
$
6.2
24%
$
7.1
31%
$
30.9
34%
Power
$
1.4
7%
$
0.5
2%
$
0.3
1%
$
0.6
3%
$
2.8
3%
Other Commercial, Industrial and Defense
$
4.6
22%
$
4.3
20%
$
6.6
26%
$
8.0
34%
$
23.6
26%
Total
$
20.6
$
21.6
$
25.3
$
23.1
$
90.6
SALES BY INDUSTRY FY 2019
($ in
millions)
FY 2019
Q1
% of
Q2
% of
Q3
% of
Q4
% of
FY2019
% of
6/30/18
Total
9/30/18
Total
12/31/18
Total
3/31/19
Total
Total
Refining
$
19.8
67%
$
9.7
45%
$
6.6
39%
$
9.6
41%
$
45.6
50%
Chemical/ Petrochemical
$
3.0
10%
$
3.8
18%
$
2.9
17%
$
7.4
31%
$
17.1
18%
Power
$
3.1
10%
$
2.1
10%
$
2.7
15%
$
2.0
8%
$
9.9
11%
Other Commercial, Industrial and Defense
$
3.7
13%
$
5.8
27%
$
5.0
29%
$
4.6
20%
$
19.1
21%
Total
$
29.6
$
21.4
$
17.2
$
23.6
$
91.8
Graham Corporation
Fourth Quarter Fiscal
2020
Additional Information -
Unaudited
(Continued)
SALES BY REGION FY 2020 ($ in millions)
FY 2020
Q1
% of
Q2
% of
Q3
% of
Q4
% of
FY2020
% of
6/30/19
Total
9/30/19
Total
12/31/19
Total
3/31/20
Total
Total
United States
$
14.4
70%
$
15.7
73%
$
13.4
53%
$
14.5
63%
$
58.0
64%
Middle East
$
0.8
4%
$
0.5
2%
$
7.5
30%
$
4.3
19%
$
13.1
14%
Asia
$
3.2
16%
$
1.0
5%
$
0.7
3%
$
0.6
2%
$
5.5
6%
Other
$
2.2
10%
$
4.4
20%
$
3.7
14%
$
3.7
16%
$
14.0
16%
Total
$
20.6
$
21.6
$
25.3
$
23.1
$
90.6
SALES BY REGION FY 2019
($
in millions)
FY 2019
Q1
% of
Q2
% of
Q3
% of
Q4
% of
FY2019
% of
6/30/18
Total
9/30/18
Total
12/31/18
Total
3/31/19
Total
Total
United States
$
13.5
46%
$
15.0
70%
$
14.3
83%
$
16.6
70%
$
59.4
65%
Middle East
$
0.4
1%
$
0.5
2%
$
0.8
5%
$
0.9
4%
$
2.6
3%
Asia
$
2.7
9%
$
1.9
9%
$
1.0
6%
$
4.7
20%
$
10.2
11%
Other
$
13.0
44%
$
4.0
19%
$
1.1
7%
$
1.4
6%
$
19.6
21%
Total
$
29.6
$
21.4
$
17.2
$
23.6
$
91.8
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200610005154/en/
Jeffrey F. Glajch Vice President – Finance and CFO (585)
343-2216 jglajch@graham-mfg.com
Deborah K. Pawlowski / Christopher M. Gordon Kei Advisors
LLC (716) 843-3908 / (716) 843-3748 dpawlowski@keiadvisors.com /
cgordon@keiadvisors.com
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