Graham Corporation reported a significant increase in financial performance for the first quarter of fiscal 2027, ending June 30, 2026. The company achieved net sales of $71.3 million, a 29% increase from $55.5 million in the same period last year. This growth was driven by a strong performance in the Defense market, which saw sales rise by 40% to $41.4 million, and an 86% increase in the Space market, contributing $6.3 million. The acquisition of FlackTek, completed in January 2026, added approximately $6.6 million to revenue during the quarter.
Despite the revenue growth, Graham Corporation's net income decreased to $3.9 million, or $0.33 per diluted share, compared to $4.6 million, or $0.42 per diluted share, in the prior year. The decline in profitability was attributed to increased selling, general, and administrative expenses, which rose by 33% to $13.1 million, largely due to costs associated with the FlackTek acquisition and ongoing investments in personnel and technology. The gross profit margin also fell to 25.0%, down from 26.5% a year earlier, reflecting a shift in the sales mix towards lower-margin Defense projects.
Operationally, Graham Corporation's backlog reached a record $557.2 million, a 15% increase from the previous year, indicating strong future revenue potential. The company secured orders totaling $95.9 million during the quarter, resulting in a book-to-bill ratio of 1.3. Notably, the Defense sector accounted for 65% of total orders, underscoring the company's strategic focus on this market. The company anticipates recognizing approximately 35% to 40% of its backlog as revenue within the next year.
In terms of liquidity, Graham Corporation reported cash and cash equivalents of $27.0 million as of June 30, 2026, a substantial increase from $6.6 million at the end of the previous fiscal year. This increase was primarily due to financing activities, including a $50 million stock issuance to fund growth initiatives. The company has also maintained a strong balance sheet, with no outstanding borrowings under its $80 million revolving credit facility.
Looking ahead, Graham Corporation has reiterated its fiscal 2027 guidance, projecting net sales between $285 million and $295 million, with an expected gross profit margin of 24.5% to 25.5%. The company plans to continue investing in its operations, with capital expenditures anticipated to be between $18 million and $22 million, aimed at enhancing manufacturing capabilities and supporting long-term growth objectives.
About GRAHAM CORP
Graham Corporation designs and manufactures mission-critical fluid, heat transfer, vacuum, and turbomachinery products for defense, energy, and space markets. Its offerings include custom-engineered systems for nuclear propulsion, oil refining, renewable energy, and space exploration. Serving government agencies, OEMs, and industrial clients worldwide, the company emphasizes advanced engineering, quality, and flexible production to deliver complex, high-reliability solutions across diverse, enduring markets.
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