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Jun 30, 2021
Graham Q1 2022 Earnings Report
Reported first quarter fiscal 2022 results, which included one month of Barber-Nichols financials, and announced Daniel J. Thoren will be promoted to President and CEO.
Key Takeaways
Graham Corporation's first quarter fiscal 2022 sales increased by 21% to $20.2 million, driven by the acquisition of Barber-Nichols and higher sales to the refining industry. However, profits and margins were heavily impacted by a poor product mix.
Revenue increased by 21% to $20.2 million, driven by defense and refining industry sales.
Orders increased to $20.9 million, including $11.4 million from the refining industry.
Backlog at quarter-end was $235.9 million, with 80% for the defense industry; the space industry was added to backlog with the acquisition of Barber Nichols.
Profits and margins were heavily impacted by product mix.
Graham
Graham
Graham Revenue by Segment
Revenue by Segment
Defense Revenue
CapyFin.com Forward Guidance
The company expects that revenue and profits will ramp through the second half of the fiscal year and sees fiscal 2022 as a transition year as it relates to earnings, given the timing of conversion of first order projects for the U.S. Navy.
Positive Outlook
- Improvement in orders in the quarter, specifically from the refining market.
- Quoting activity is picking up and customers are more optimistic.
- Second quarter will benefit from having BN for a full three months.
- Optimistic about the future and believes they have the right strategy, the best talent and the ideal technologies to capitalize on the growing requirements of our customers in the defense industry.
- Encouraged with the improvements they are seeing in our core energy markets.
Challenges Ahead
- Based on the timing of customers’ projects, expect that revenue and profits will ramp through the second half of the fiscal year.
- See fiscal 2022 as a transition year as it relates to earnings, given the timing of conversion of first order projects for the U.S. Navy.
- Revenue in fiscal 2022 is expected to be $130 million to $140 million with 45% to 50% associated with the defense industry.
- Revenue expectations are inclusive of BN’s 10-month revenue contribution for the fiscal year which is expected to be between $45 million to $48 million.
- Adjusted EBITDA is expected to be approximately $7.0 million to $9.0 million in fiscal 2022.