Graham (GHM) Small-Cap Growth Virtual Investor Conference summary

Strategic Direction and Business Transformation

• Shifted from cyclical refinery/petrochemical focus to diversified markets, especially defense and space, through acquisitions and organic growth.

• Defense now represents the majority of revenue, providing stability via long-term contracts and recurring aftermarket opportunities.

• Acquisitions like Barber-Nichols and P3 Technologies expanded capabilities in space, energy, and medical markets, adding differentiated propulsion and fluid flow technologies.

• Strategic initiatives emphasize full lifecycle projects, operational excellence, customer engagement, and prudent investment for sustainable growth.

• International presence in India and China, and expansion in Batavia, NY, support competitiveness, market access, and U.S. Navy shipbuilding.

Financial Performance and Outlook

• Fiscal 2024 revenue reached $185.5 million, up 18% year-over-year, with record gross profit and margin expansion to 21.9%.

• Adjusted EBITDA for FY24 increased 56% to $13.3 million, with margin expanding to 7.2%.

• Adjusted net income rose to $6.8 million ($0.63/share), up 163%; FY24 net income was $4.6 million, up from $0.4 million.

• Cash flow from operations was $28.1 million, supporting debt reduction, acquisitions, and capital investments with >20% ROIC.

• FY25 guidance: revenue of $200–$210 million (11% growth), adjusted EBITDA of $16.5–$19.5 million, and long-term targets of $240–$250 million revenue and low- to mid-teen EBITDA margin by FY27.

Orders, Backlog, and Customer Base

• Record FY24 orders of $268.4 million, up 32%, with a 1.4x book-to-bill ratio; backlog at year-end was $399.2 million, up 30%.

• 84% of backlog is defense-related, providing strong revenue visibility; 35–40% of backlog expected to convert to revenue in the next 12 months.

• Representative customers include U.S. Navy, NASA, Boeing, Raytheon, Lockheed Martin, and Blue Origin.

• Aftermarket sales contributed $35–$40 million, expected to grow at least with inflation and maintain a significant revenue share.

• Long-term U.S. Navy contracts and planned projects estimated at $1.0–$1.3 billion through FY2055.