Q3 2025 Graham Corp Earnings Call Transcript
Key Points
- Graham Corp (GHM) reported a 7.3% increase in revenue for the third quarter, reaching $47 million, driven by growth across key end markets.
- The company's gross margin improved by 260 basis points to 24.8%, attributed to higher sales volume, favorable project mix, and better execution.
- Adjusted EBITDA margin expanded by 180 basis points to 8.6% of sales, indicating strong bottom-line growth.
- The company has a significant backlog of $385 million, providing excellent visibility into future operations and stability.
- Graham Corp (GHM) is making strategic investments in new facilities and technologies, such as the Batavia manufacturing facility and cryogenic propellant test facility, to support future growth.
- Orders for the quarter declined to $24.8 million, reflecting the lumpiness and timing issues in the business.
- SG&A expenses increased by $0.9 million due to strategic investments, impacting short-term profitability.
- The company faces challenges in the shipbuilding market, with potential supply chain and labor issues affecting operations.
- Defense orders appeared lower than usual, attributed to the timing of large contracts and the inherent lumpiness in the sector.
- The effective tax rate for the quarter was 29%, which can vary significantly due to foreign subsidiaries and discrete items.
Greetings, and welcome to the Graham Corporation fiscal third-quarter 2025 financial results conference call. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce Tom Cook, Managing Director at ICR. Please go ahead.
Thank you, Paul, and good morning everyone. Welcome to Graham's fiscal third-quarter 2025 earnings call. With me on the call today are Dan Thoren, CEO; Chris Thome, Chief Financial Officer; and Matt Malone, President and Chief Operating Officer.
This morning, we released our financial results. Our earnings release and accompanying presentation to today's call are available on our website at ir.grahamcorp.com.
You should be aware that we may make forward-looking statements during the formal discussion, as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated here today.
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