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Mar 31, 2020
Graham Q4 2020 Earnings Report
Graham Corporation's Q4 results were impacted by COVID-19, with delayed revenue and reduced production, but the company maintained a strong balance sheet and backlog.
Key Takeaways
Graham Corporation reported Q4 revenue of $23.1 million, impacted by approximately $7 million in delayed revenue due to the COVID-19 pandemic. EPS was $0.06. The company had a strong backlog of $112 million, with 52% from the defense industry, and a cash balance of $73 million.
Q4 revenue was $23.1 million, reflecting a $7 million delay due to COVID-19.
Q4 EPS was $0.06.
Backlog at the end of the year was $112 million, with defense industry accounting for 52%.
Cash balance was strong at $73 million as of March 31, 2020.
Graham
Graham
Forward Guidance
Due to the economic impact of COVID-19, the company is not providing guidance for fiscal 2021 at this time but expects revenue, earnings and cash generation to be challenged in the first quarter of fiscal 2021. $3.2 million of orders were canceled in the fourth quarter and three orders were delayed due to the COVID-19 pandemic, causing revenue of $4.1 million to be delayed beyond fiscal 2021.
Positive Outlook
- Plan to return to more normal production levels in June and begin working through our backlog, which will help the results from operations for the remaining quarters of fiscal 2021.
- Expect to convert 70-75% of our $112.4 million March 31, 2020 backlog during the year.
- Nearing a steady state of annual revenue from the defense industry with the products we provide for the U.S. Navy.
- Expect defense industry revenue to reach a level of $20 million to $25 million per year for several years as we replace backlog with new projects over time.
- Intend to be opportunistic in regards to acquisition opportunities that may occur due to market consolidation and contraction.
Challenges Ahead
- Manufacturing production impeded in the first quarter of fiscal 2021, expect that revenue, earnings and cash generation will likewise be challenged.
- Had approximately $3.2 million of orders canceled in the fourth quarter.
- Three orders delayed due to the COVID-19 pandemic, causing revenue of $4.1 million to be delayed beyond fiscal 2021.
- Customer requests for the delays were both in the fourth quarter as well as thus far in the first quarter of fiscal 2021.
- Cautious on our outlook until we have more clarity on the potential for future demand.