Graham Corporation reported a notable increase in financial performance for the third quarter of fiscal 2025, ending December 31, 2024. The company achieved net sales of $47.0 million, a 7% increase from $43.8 million in the same quarter of the previous year. For the first nine months of fiscal 2025, net sales reached $150.6 million, up 10% from $136.5 million in the prior year. The gross profit for the third quarter was $11.7 million, with a gross profit margin of 24.8%, reflecting a 260 basis point improvement compared to the same period last year. Net income for the quarter was $1.6 million, or $0.14 per diluted share, compared to $165,000, or $0.02 per diluted share, in the prior year.
The company’s financial results were bolstered by significant growth in the defense and chemical/petrochemical markets, with defense sales increasing by 11% and chemical/petrochemical sales rising by 64%. However, sales in the refining sector declined by 16% due to project timing issues in India. The increase in gross profit margin was attributed to better execution, improved pricing, and increased leverage on fixed overhead costs, partially offset by higher incentive compensation. Additionally, Graham Corporation benefited from a $2.1 million grant from the BlueForge Alliance, which contributed $255,000 to gross profit.
Strategically, Graham Corporation completed the acquisition of P3 Technologies, LLC in November 2023, which is expected to enhance its turbomachinery solutions and diversify its market offerings. The acquisition cost was approximately $11.2 million, funded through borrowings on the company’s line of credit. The integration of P3 is anticipated to contribute positively to future revenue streams, with P3 generating $963,000 in sales during the third quarter and $3.4 million for the first nine months post-acquisition.
Operationally, Graham Corporation reported a backlog of $384.7 million as of December 31, 2024, a slight decrease from $390.9 million at the end of the previous fiscal year. The company’s cash and cash equivalents increased to $30.0 million, up from $16.9 million at the end of March 2024, primarily due to strong cash flow from operations. The company also announced a leadership transition, with President & CEO Daniel J. Thoren set to become Executive Chairman in June 2025, while Matthew J. Malone will take over as President & COO.
Looking ahead, Graham Corporation has maintained its fiscal 2025 guidance, projecting net sales between $200 million and $210 million, with a gross profit margin of 24% to 25%. The company expects to continue benefiting from strong demand in the defense sector, while also navigating challenges in traditional energy markets. The outlook reflects confidence in the company’s strategic initiatives and operational capabilities, despite potential market fluctuations and geopolitical uncertainties.
About GRAHAM CORP
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