Graham (GHM) 15th Annual Midwest IDEAS Investor Conference summary

Strategic direction and business model

• Focus on building a diversified, high-performance company through organic and inorganic growth, targeting 8%-10% annual organic growth and aiming for $240M–$250M revenue by FY2027.

• Emphasis on full lifecycle business, from design and development to manufacturing and servicing critical equipment for defense, energy, and space sectors.

• Decentralized business unit structure with shared corporate services and guidance.

• Strategic investments in R&D, capital projects, and capacity expansions, all with >20% ROI, to maintain technological edge and support growth.

• Diversification into new energy (hydrogen, solar, nuclear, geothermal) and space markets, leveraging installed base and new talent.

Market diversification and growth initiatives

• Major transformation since 2021 acquisition of Barber-Nichols, doubling revenue and diversifying end markets.

• Defense, especially U.S. Navy programs, now represents the largest and most stable revenue stream, with long-term contracts and sole supplier status on key platforms.

• Space sector involvement expanded with P3 Technologies acquisition, targeting high-value, validated programs.

• Energy and chemical business shifting toward maintenance-driven revenue in the U.S., with CapEx growth opportunities in India and the Middle East.

• Aftermarket business remains high-margin but low-growth, funding other initiatives; defense aftermarket is a growing focus.

Financial performance and outlook

• FY2024 revenue reached $185.5M, with TTM Q1 FY2025 at $187.9M, nearly doubling since FY2021.

• Q1 FY25 revenue reached $50 million, up 5% year-over-year, driven by 28% growth in defense and contributions from P3 Technologies.

• Gross margin improved to 24.8%, aided by higher-margin defense projects and a $480,000 training grant.

• Adjusted EPS rose 18% to $0.33; adjusted EBITDA margin increased to 10.3% from 7% in FY24.

• FY2025 guidance: revenue $200M–$210M (+11%), gross margin 22–23%, adjusted EBITDA $16.5M–$19.5M (+35%), effective tax rate 20–22%, tracking toward 2027 goals of 8%-10% organic growth and low- to mid-teen EBITDA margins.