Graham Corporation Reports 23% Increase in Net Sales for Q2 Fiscal 2026

Graham Corporation reported a significant increase in financial performance for the second quarter of fiscal 2026, with net sales reaching $66.0 million, a 23% increase from $53.6 million in the same period last year. For the first six months of the fiscal year, net sales totaled $121.5 million, up from $103.5 million in the prior year. The company's gross profit for the quarter was $14.3 million, reflecting a 12% increase compared to $12.8 million in the previous year, although the gross profit margin declined to 21.7% from 23.9% due to a higher proportion of lower-margin material receipts.

The company’s operating income for the second quarter was $4.3 million, slightly up from $4.2 million a year earlier, while net income decreased to $3.1 million, or $0.28 per diluted share, compared to $3.3 million, or $0.30 per diluted share, in the same quarter of fiscal 2025. For the first half of fiscal 2026, net income was $7.7 million, an increase from $6.2 million in the prior year. The decline in net income for the quarter was attributed to increased selling, general, and administrative expenses, which rose to $10.2 million from $9.2 million, reflecting investments in operations and higher performance-based compensation.

Operationally, Graham Corporation saw a notable increase in orders, with bookings of $83.2 million in the second quarter, compared to $63.7 million in the same period last year. This growth contributed to a record backlog of $500.1 million as of September 30, 2025, up 23% from $407.0 million a year earlier. The company attributed this increase to strong demand across its primary markets, particularly in defense, which accounted for 85% of the total backlog. The company also reported that 97% of orders in the first half of fiscal 2026 were from the U.S. market, underscoring its strong position in the defense sector.

In terms of strategic developments, Graham Corporation announced the acquisition of certain assets from Xdot Bearing Technologies, a firm specializing in foil bearing technology, for $1.5 million. This acquisition is expected to enhance the company’s capabilities in engineered solutions and is anticipated to be slightly accretive to fiscal 2026 net income. The company continues to invest in capital expenditures, totaling $11.1 million in the first half of fiscal 2026, primarily for facility expansions and equipment upgrades to support growth in defense and space markets.

Looking ahead, Graham Corporation provided an optimistic outlook for fiscal 2026, projecting net sales between $225 million and $235 million, with gross profit margins expected to range from 24.5% to 25.5%. The company anticipates adjusted EBITDA of $22 million to $28 million and capital expenditures of $15 million to $18 million. The outlook reflects confidence in the company’s ability to navigate market conditions and capitalize on growth opportunities, particularly in the defense and energy sectors.