Graham (GHM) Investor presentation summary

Business overview

• Operates as a global leader in mission-critical fluid, power, vacuum, heat transfer, and advanced mixing solutions across defense, energy & process, and space markets.

• FY25 revenue split: 58% defense, 35% energy & process, 7% space, with a $1.0B market cap and 21% revenue CAGR since FY21.

• Defense portfolio benefits from increased U.S. defense budgets and shipbuilding, with 80% of revenue sole-sourced and high barriers to entry.

• Energy & process segment sees stable demand in traditional markets and growth in clean energy, SMRs, hydrogen, and international markets.

• Space segment is positioned for long-term growth, supporting rocket launches, satellites, and lunar exploration with a 37% CAGR in recent years.

Investment thesis and growth strategy

• $516M backlog provides long-term visibility and enables prioritized capital allocation.

• Targeting 13-15% adjusted EBITDA margin and >20% ROIC by FY27 through operational excellence and strategic projects.

• Diversified end-markets with stable defense and peak-maximized commercial exposure.

• Growth-oriented leadership with a proven management team focused on the next phase of expansion.

• Phased approach: stabilize, improve, and growth, with recent completion of the stabilize phase and momentum building into improvement and growth.

Recent acquisitions and portfolio expansion

• Acquired FlackTek for $35M plus up to $25M earnout, adding advanced materials processing as a scalable third core platform.

• FlackTek's proprietary bladeless mixing technology serves defense, energy, space, and industrial markets, with a projected $30M revenue in 2026.

• Acquisition of Xdot Bearing Technologies for $1.5M enhances turbomachinery capabilities and fills a key technology gap.

• Strategic rationale includes expanding engineered solutions, recurring revenue from consumables, and leveraging a shared customer base.