UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 27, 2015
Graham Corporation
(Exact name of Registrant as specified in its charter)
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Delaware |
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1-8462 |
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16-1194720 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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20 Florence Avenue, Batavia, New York |
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14020 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code: (585) 343-2216
N/A
(Former name or
former address, if changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. |
Results of Operations and Financial Condition. |
On October 28, 2015, Graham
Corporation (the Company) issued a press release describing its results of operations and financial condition for its second quarter ended September 30, 2015. The Companys press release is attached to this Current Report on Form
8-K as Exhibit 99.1.
On October 27, 2015, the Company issued a press release announcing
the payment of a cash dividend. The Companys press release is attached to this Current Report on Form 8-K as Exhibit 99.2.
Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit No. |
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Description |
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99.1 |
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Press Release dated October 28, 2015 describing the results of operations and financial condition for Graham Corporations second quarter ended September 30, 2015. |
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99.2 |
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Press Release dated October 27, 2015 regarding the payment by Graham Corporation of a cash dividend. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
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Graham Corporation |
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Date: October 28, 2015 |
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By: |
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/s/ Jeffrey Glajch |
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Jeffrey Glajch |
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Vice President Finance & Administration and Chief Financial Officer |
Exhibit 99.1
IMMEDIATE RELEASE
Graham Corporation Reports
Fiscal 2016 Second Quarter Results
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Second quarter sales were $22.8 million |
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Net income for the second quarter was $2.0 million, or $0.20 per diluted share |
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Backlog at quarter-end remained strong at $108.1 million |
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Approximately 187,000 shares were repurchased for $3.4 million |
BATAVIA, NY,
October 28, 2015 Graham Corporation (NYSE: GHM), a global business that designs, manufactures and sells critical equipment for the oil refining, petrochemical, power and defense industries, today reported its financial results for its
second quarter ended September 30, 2015. Grahams current fiscal year (fiscal 2016) ends March 31, 2016.
Net sales in the
second quarter of fiscal 2016 were $22.8 million, compared with net sales of $35.6 million in the second quarter of the fiscal year ended March 31, 2015 (fiscal 2015). Second quarter fiscal 2016 sales reflect the weakened
fundamentals in the refining and chemical/petrochemical markets that began in November 2014. Net income in the second quarter was $2.0 million, or $0.20 per share, compared with $4.2 million, or $0.41 per share, in the prior years quarter. Net
income as a percent of sales was 9% in the current years second quarter.
James R. Lines, Grahams President and Chief Executive Officer,
commented, We benefited from productivity improvements realized in the quarter, augmented by investments in operational enhancements over the past couple years. We continue to invest in personnel, execution capacity and capabilities that we
believe will drive long-term growth. We intend to continue to balance near-term earnings with long-term earnings expansion initiatives, which include investments in our naval and nuclear market strategies. Importantly, we believe the long-term
fundamentals within our markets and our own growth opportunities remain strong.
Sales to Middle East Grow in Second Quarter
(see accompanying tables for a breakdown of sales by industry and region)
Sales to most of the Companys industry categories were down in the second quarter compared with the fiscal 2015 second quarter, with the exception of
sales to other commercial and industrial markets, which were up by $0.5 million, or 10%.
On a geographic basis, sales to all regions were also down in
the second quarter compared with the same prior year quarter, except for sales to the Middle East. Sales to the U.S. market were $15.2 million, or 67% of consolidated sales. Sales to markets outside of the U.S. accounted for $7.6 million, or 33%.
Fluctuations in Grahams sales among geographic locations and industries can vary measurably from quarter-to-quarter based on the timing and
magnitude of projects. Graham does not believe that such quarter-to-quarter fluctuations are indicative of business trends, which it believes are more apparent on a trailing twelve month basis.
-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
2
of 11
Second Quarter Fiscal 2016 Operating Performance
Gross profit in the second quarter was $7.1 million, or 31% of sales, compared with $11.0 million, or 31% of sales, in the same period of the prior fiscal
year. Fiscal 2016s second quarter gross margin was strong relative to the sales level, resulting from productivity improvements realized as the CVN-79 U.S. Navy project neared completion in the quarter, as well as a vendor settlement. Gross
profit dollars in the second quarter decreased on lower volume compared with the prior-years quarter.
Selling, general and administrative
(SG&A) expenses were $4.2 million in the second quarter, down 11% from $4.8 million in the same prior-year period due primarily to the restructuring activity that occurred at the end of fiscal 2015. SG&A as a percent of sales was
19% in the second quarter of fiscal 2016 compared with 13% in the same prior-year period. The increase as a percent of sales was due to the fixed nature of the Companys supporting infrastructure, which has been maintained on lower sales to
support expected future growth.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $3.5 million in the second
quarter, compared with $6.8 million in the same prior-year period. EBITDA margin in the second quarter was 15% of sales compared with 19% in the same prior-year quarter. Graham believes that when used in conjunction with measures prepared in
accordance with U.S. generally accepted accounting principles (GAAP), EBITDA, which is a non-GAAP measure, helps in the understanding of its operating performance. Grahams credit facility also contains ratios based on EBITDA.
See the attached tables for additional important disclosures regarding Grahams use of EBITDA as well as a reconciliation of net income to EBITDA.
Grahams effective tax rate for the second quarter of fiscal 2016 was 33%, consistent with the same prior-year period.
First Half Fiscal 2016 Review
Net sales were $50.4
million, compared with $64.1 million in the first six months of fiscal 2015. International sales were $17.6 million in the first six months and represented 35% of total sales compared with $20.0 million, or 31% of sales, in the prior-year period.
Sales to the U.S. were $32.8 million, or 65%, of net first half sales in fiscal 2016 compared with $44.1 million, or 69%, of fiscal 2015 first half net sales.
Gross profit was $15.2 million in the first six months, compared with $18.9 million of gross profit in the same prior-year period, with the decrease primarily
due to lower volume. Gross margin was approximately 30% for both periods, with the fiscal 2016 period benefiting from productivity improvements related to the CVN-79 U.S. Navy project, a vendor settlement and higher facility utilization in the first
quarter, despite lower net sales in the first half of fiscal 2016. SG&A in the fiscal 2016 first half was $8.9 million, down 2% or $0.2 million. As a percent of sales, SG&A was 18% in the first half of fiscal 2016 compared with 14% in the
same prior-year period, with the increased percent due to the lower sales volume.
EBITDA was $7.5 million in the first six months compared with
$11.0 million the prior-year period. As a percent of sales, EBITDA was 15% compared with 17% last year, reflecting the impact of volume, productivity improvements and facility utilization. See the attached tables for additional important
disclosures regarding Grahams use of EBITDA as well as a reconciliation of net income to EBITDA.
Net income for the first half of fiscal 2016
was $4.3 million, or $0.43 per diluted share, compared with net income of $6.6 million, or $0.65 per diluted share, in the first six months of fiscal 2015.
-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
3
of 11
Strong Balance Sheet Supports Strategic Initiatives
Cash, cash equivalents and investments at September 30, 2015 increased $2.1 million to $62.4 million, compared with ending balances at March 31,
2015.
Cash provided by operations in the second quarter and first half of fiscal 2016 was $4.4 million and $7.7 million, respectively, compared with $5.3
million and $8.5 million in the second quarter and first half of fiscal 2015, respectively.
Capital expenditures were $0.5 million in the first half of
fiscal 2016, compared with $4.1 million in the first half of fiscal 2015. The majority of the prior years spending was for the capacity expansion of the Companys Batavia, New York facility completed in the first half of fiscal 2015. The
Company continues to expect capital expenditures for fiscal 2016 to be between $2 million to $2.5 million, primarily for equipment upgrades and productivity enhancements.
Graham had neither borrowings under its credit facility, nor any long-term debt outstanding, at September 30, 2015.
Jeffrey Glajch, Grahams Chief Financial Officer, commented, We continue to exhibit strong cash provided by operations. During the first half of
2016 we added $2.1 million to our cash balance after paying $1.6 million in dividends, repurchasing $3.4 million of shares and investing $0.5 million in capital expenditures. It is gratifying to return $5.0 million to shareholders while at the same
time adding to our cash reserves available to fund both internal and external growth opportunities.
Solid Long-term Backlog
Orders during the second quarter of fiscal 2016 were $20.6 million, net of a $3.9 million cancellation from backlog (gross orders were $24.5 million), down
from $35.4 million in the second quarter of fiscal 2015. Orders from all of the Companys markets were lower, with the largest decrease stemming from the refining market. Orders from the refining industry were down $8.7 million, and were net of
the $3.9 million cancelled order. When compared with the trailing first quarter of fiscal 2016, orders decreased $3.4 million, or 14%. There were no orders on hold as of September 30, 2015.
Orders from U.S. customers represented 59%, or $12.1 million, of total orders received during the second quarter of fiscal 2016, while orders from
international markets accounted for $8.5 million, net of the $3.9 million cancelled order noted above.
Graham expects that the balance between domestic
and international orders will continue to be variable between quarters, but that in the long run orders will be relatively balanced between these geographic markets.
The Companys backlog remained strong at $108.1 million at September 30, 2015, compared with $110.1 million at June 30, 2015 and $113.8 million
at March 31, 2015. Approximately 27% of backlog was for refinery projects, 10% was for chemical and petrochemical projects and 11% was for power projects, including nuclear. Approximately 47% of backlog was for U.S. Navy projects and 5% was for
other industrial or commercial applications.
Approximately 45% to 50% of orders currently in backlog are expected to be converted to sales within the
next 12 months, approximately 5% to 10% are expected to be converted between the next 12 to 24 months, and approximately 40% to 45% are expected to be converted beyond 24 months.
-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
4
of 11
Updating 2016 Guidance; Long-term Outlook Unchanged
The Companys fiscal 2016 revenue expectations continue to be between $95 million and $105 million. Gross margin for fiscal 2016 is expected to be between
27% and 28%, impacted by lower production facility utilization and pricing pressure compared with fiscal 2015. SG&A expense is expected to be between 17% and 18% of sales. Graham expects its fiscal 2016 full year tax rate to be between 32% and
33%.
Mr. Lines concluded, We remain focused on long-term growth and intend to continue to prudently invest in personnel, capabilities and
execution capacity as we manage across current market conditions. We believe there are growth opportunities as we move forward and we are well positioned to execute our strategy and grow our market share. We believe that our solid profitability,
cash flow from operations and strong balance sheet will enable us to generate stronger and sustained long-term earnings.
Webcast and Conference
Call
Graham management will host a conference call and live webcast today at 11:00 a.m. Eastern Time to review Grahams financial condition and
operating results for its second quarter and first half of fiscal 2016, as well as its strategy and outlook. The review will be accompanied by a slide presentation which will be made available immediately prior to the conference call on
Grahams website at www.graham-mfg.com under the heading Investor Relations. A question-and-answer session will follow the formal presentation.
Grahams conference call can be accessed by calling (201) 689-8560. Alternatively, the webcast can be monitored on Grahams website at
www.graham-mfg.com under the heading Investor Relations.
A telephonic replay will be available from approximately 2:00 p.m. Eastern
Time on the day of the call through Wednesday, November 4, 2015. To listen to the archived call, dial (858) 384-5517, and enter conference ID number 13621120. A transcript of the call will be placed on Grahams website, once
available.
ABOUT GRAHAM CORPORATION
Graham is a
global business that designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. Energy markets include oil refining, cogeneration, nuclear and alternative power. For the defense industry, the
Companys equipment is used in nuclear propulsion power systems for the U.S. Navy. Grahams global brand is built upon world-renowned engineering expertise in vacuum and heat transfer technology, responsive and flexible service and
unsurpassed quality. Graham designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. Graham is also a leading nuclear code accredited fabrication and specialty machining company. Graham
supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Grahams equipment can also be found in other diverse applications such as metal refining, pulp and paper processing, water heating,
refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. Grahams reach spans the globe and its equipment is installed in facilities from North and South America to Europe, Asia, Africa and the
Middle East. Graham routinely posts news and other important information on its website, www.graham-mfg.com, where additional comprehensive information on Graham Corporation and its subsidiaries can be found.
-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
5
of 11
Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended.
Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by
words such as expects, estimates, confidence, projects, typically, outlook, anticipates, believes, appears, could,
opportunities, seeking, plans, aim, pursuit, and other similar words. All statements addressing operating performance, events, or developments that Graham Corporation expects or anticipates
will occur in the future, including but not limited to, expected expansion and growth opportunities within the domestic and international markets, anticipated revenue, the timing of conversion of backlog to sales, market presence, profit margins,
tax rates, foreign sales operations, its ability to improve cost competitiveness, customer preferences, changes in market conditions in the industries in which it operates, changes in commodities prices, the effect on its business of volatility in
commodities prices, changes in general economic conditions and customer behavior, forecasts regarding the timing and scope of the economic recovery in its markets, its acquisition and growth strategy and the expected performance of Energy
Steel & Supply Co, are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Graham
Corporations most recent Annual Report filed with the Securities and Exchange Commission, included under the heading entitled Risk Factors.
Should one or more of these risks or uncertainties materialize, or should any of Graham Corporations underlying assumptions prove incorrect, actual
results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on Graham Corporations forward-looking statements. Except as required by law, Graham Corporation disclaims any obligation to update
or publicly announce any revisions to any of the forward-looking statements contained in this news release.
For more information contact:
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Jeffrey F. Glajch |
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Deborah K. Pawlowski / Karen L. Howard |
Vice President - Finance and CFO |
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Kei Advisors LLC |
Phone: (585) 343-2216 |
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Phone: (716) 843-3908 / (716) 843-3942 |
jglajch@graham-mfg.com |
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dpawlowski@keiadvisors.com / khoward@keiadvisors.com |
FINANCIAL TABLES FOLLOW.
-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
6
of 11
Graham Corporation Second Quarter Fiscal 2016
Consolidated Statements of OperationsUnaudited
(Amounts in thousands, except per share data)
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Three Months Ended |
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Six Months Ended |
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September 30, |
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September 30, |
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2015 |
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2014 |
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% Change |
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2015 |
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2014 |
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% Change |
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Net sales |
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$ |
22,798 |
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$ |
35,566 |
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(36 |
%) |
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$ |
50,415 |
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$ |
64,068 |
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(21 |
%) |
Cost of products sold |
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15,663 |
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24,582 |
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(36 |
%) |
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35,243 |
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45,152 |
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(22 |
%) |
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Gross profit |
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7,135 |
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10,984 |
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(35 |
%) |
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15,172 |
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18,916 |
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(20 |
%) |
Gross profit margin |
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31.3 |
% |
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30.9 |
% |
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30.1 |
% |
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29.5 |
% |
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Other expenses and income: |
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Selling, general and administrative |
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4,187 |
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4,694 |
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(11 |
%) |
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8,767 |
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8,989 |
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(2 |
%) |
Selling, general and administrative amortization |
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59 |
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58 |
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2 |
% |
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117 |
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|
112 |
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4 |
% |
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4,246 |
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4,752 |
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(11 |
%) |
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8,884 |
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9,101 |
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(2 |
%) |
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Operating profit |
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2,889 |
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6,232 |
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(54 |
%) |
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6,288 |
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9,815 |
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(36 |
%) |
Operating profit margin |
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12.7 |
% |
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17.5 |
% |
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12.5 |
% |
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15.3 |
% |
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Interest income |
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(53 |
) |
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(43 |
) |
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23 |
% |
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(105 |
) |
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(89 |
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18 |
% |
Interest expense |
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1 |
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3 |
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(67 |
%) |
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4 |
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6 |
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(33 |
%) |
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Income before provision for income taxes |
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2,941 |
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6,272 |
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(53 |
%) |
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6,389 |
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9,898 |
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(35 |
%) |
Provision for income taxes |
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965 |
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2,086 |
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(54 |
%) |
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2,052 |
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3,320 |
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(38 |
%) |
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Net income |
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$ |
1,976 |
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$ |
4,186 |
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(53 |
%) |
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$ |
4,337 |
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$ |
6,578 |
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(34 |
%) |
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Per share data: |
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Basic: |
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Net income |
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$ |
0.20 |
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$ |
0.41 |
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(51 |
%) |
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$ |
0.43 |
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$ |
0.65 |
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(34 |
%) |
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Diluted: |
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Net income |
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$ |
0.20 |
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$ |
0.41 |
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(51 |
%) |
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$ |
0.43 |
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$ |
0.65 |
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(34 |
%) |
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Weighted average common shares outstanding: |
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Basic |
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10,078 |
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10,126 |
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10,116 |
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10,116 |
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Diluted |
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10,083 |
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10,148 |
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10,125 |
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10,138 |
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Dividends declared per share |
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$ |
0.08 |
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$ |
0.04 |
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$ |
0.16 |
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$ |
0.08 |
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-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
7
of 11
Graham Corporation Second Quarter Fiscal 2016
Consolidated Balance SheetsUnaudited
(Amounts in thousands, except per share data)
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September 30, |
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March 31, |
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2015 |
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2015 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
29,416 |
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$ |
27,271 |
|
Investments |
|
|
33,000 |
|
|
|
33,000 |
|
Trade accounts receivable, net of allowances ($91 and $62 at September 30 and March 31, 2015, respectively) |
|
|
22,161 |
|
|
|
17,249 |
|
Unbilled revenue |
|
|
8,544 |
|
|
|
18,665 |
|
Inventories |
|
|
10,654 |
|
|
|
13,994 |
|
Prepaid expenses and other current assets |
|
|
922 |
|
|
|
529 |
|
Income taxes receivable |
|
|
2,352 |
|
|
|
339 |
|
Deferred income tax asset |
|
|
262 |
|
|
|
647 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
107,311 |
|
|
|
111,694 |
|
Property, plant and equipment, net |
|
|
19,125 |
|
|
|
19,812 |
|
Prepaid pension asset |
|
|
1,943 |
|
|
|
1,332 |
|
Goodwill |
|
|
6,938 |
|
|
|
6,938 |
|
Permits |
|
|
10,300 |
|
|
|
10,300 |
|
Other intangible assets, net |
|
|
4,338 |
|
|
|
4,428 |
|
Other assets |
|
|
129 |
|
|
|
150 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
150,084 |
|
|
$ |
154,654 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of capital lease obligations |
|
$ |
51 |
|
|
$ |
60 |
|
Accounts payable |
|
|
12,508 |
|
|
|
13,334 |
|
Accrued compensation |
|
|
5,905 |
|
|
|
9,343 |
|
Accrued expenses and other current liabilities |
|
|
3,718 |
|
|
|
3,247 |
|
Customer deposits |
|
|
2,858 |
|
|
|
4,179 |
|
Deferred income tax liability |
|
|
264 |
|
|
|
164 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
25,304 |
|
|
|
30,327 |
|
Capital lease obligations |
|
|
79 |
|
|
|
98 |
|
Accrued compensation |
|
|
|
|
|
|
124 |
|
Deferred income tax liability |
|
|
6,717 |
|
|
|
6,363 |
|
Accrued pension liability |
|
|
340 |
|
|
|
315 |
|
Accrued postretirement benefits |
|
|
889 |
|
|
|
876 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
33,329 |
|
|
|
38,103 |
|
|
|
|
|
|
|
|
|
|
Stockholders equity: |
|
|
|
|
|
|
|
|
Preferred stock, $1.00 par value, 500 shares authorized |
|
|
|
|
|
|
|
|
Common stock, $.10 par value, 25,500 shares authorized 10,468 and 10,432 shares issued and 9,989 and 10,133 shares outstanding |
|
|
1,047 |
|
|
|
1,043 |
|
Capital in excess of par value |
|
|
21,939 |
|
|
|
21,398 |
|
Retained earnings |
|
|
108,895 |
|
|
|
106,178 |
|
Accumulated other comprehensive loss |
|
|
(8,775 |
) |
|
|
(9,056 |
) |
Treasury stock, (479 and 299 shares) |
|
|
(6,351 |
) |
|
|
(3,012 |
) |
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
116,755 |
|
|
|
116,551 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
150,084 |
|
|
$ |
154,654 |
|
|
|
|
|
|
|
|
|
|
-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
8
of 11
Graham Corporation Second Quarter Fiscal 2016
Consolidated Statements of Cash FlowsUnaudited
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
September 30, |
|
|
|
2015 |
|
|
2014 |
|
Operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
4,337 |
|
|
$ |
6,578 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
1,126 |
|
|
|
1,041 |
|
Amortization |
|
|
117 |
|
|
|
112 |
|
Amortization of unrecognized prior service cost and actuarial losses |
|
|
607 |
|
|
|
259 |
|
Stock-based compensation expense |
|
|
379 |
|
|
|
298 |
|
Deferred income taxes |
|
|
632 |
|
|
|
(145 |
) |
(Increase) decrease in operating assets: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(4,941 |
) |
|
|
(4,946 |
) |
Unbilled revenue |
|
|
10,084 |
|
|
|
(2,371 |
) |
Inventories |
|
|
3,337 |
|
|
|
2,486 |
|
Prepaid expenses and other current and non-current assets |
|
|
(401 |
) |
|
|
(552 |
) |
Prepaid pension asset |
|
|
(611 |
) |
|
|
(581 |
) |
Increase (decrease) in operating liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
(717 |
) |
|
|
2,360 |
|
Accrued compensation, accrued expenses and other current and non-current liabilities |
|
|
(2,831 |
) |
|
|
1,516 |
|
Customer deposits |
|
|
(1,319 |
) |
|
|
1,615 |
|
Income taxes payable/receivable |
|
|
(2,013 |
) |
|
|
939 |
|
Long-term portion of accrued compensation, accrued pension liability and accrued postretirement benefits |
|
|
(87 |
) |
|
|
(119 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
7,699 |
|
|
|
8,490 |
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(523 |
) |
|
|
(4,096 |
) |
Proceeds from disposal of property, plant and equipment |
|
|
3 |
|
|
|
|
|
Purchase of investments |
|
|
(18,000 |
) |
|
|
(23,000 |
) |
Redemption of investments at maturity |
|
|
18,000 |
|
|
|
19,000 |
|
|
|
|
|
|
|
|
|
|
Net cash used by investing activities |
|
|
(520 |
) |
|
|
(8,096 |
) |
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Principal repayments on capital lease obligations |
|
|
(27 |
) |
|
|
(44 |
) |
Issuance of common stock |
|
|
97 |
|
|
|
29 |
|
Dividends paid |
|
|
(1,620 |
) |
|
|
(810 |
) |
Purchase of treasury stock |
|
|
(3,399 |
) |
|
|
|
|
Excess tax benefit on stock awards |
|
|
5 |
|
|
|
34 |
|
|
|
|
|
|
|
|
|
|
Net cash used by financing activities |
|
|
(4,944 |
) |
|
|
(791 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
(90 |
) |
|
|
46 |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
2,145 |
|
|
|
(351 |
) |
Cash and cash equivalents at beginning of year |
|
|
27,271 |
|
|
|
32,146 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
29,416 |
|
|
$ |
31,795 |
|
|
|
|
|
|
|
|
|
|
-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
9
of 11
Graham Corporation Second Quarter Fiscal 2016
EBITDA ReconciliationUnaudited
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Net income |
|
$ |
1,976 |
|
|
$ |
4,186 |
|
|
$ |
4,337 |
|
|
$ |
6,578 |
|
+Net interest income |
|
|
(52 |
) |
|
|
(40 |
) |
|
|
(101 |
) |
|
|
(83 |
) |
+Income taxes |
|
|
965 |
|
|
|
2,086 |
|
|
|
2,052 |
|
|
|
3,320 |
|
+Depreciation & amortization |
|
|
622 |
|
|
|
579 |
|
|
|
1,243 |
|
|
|
1,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
3,511 |
|
|
$ |
6,811 |
|
|
$ |
7,531 |
|
|
$ |
10,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin % |
|
|
15.4 |
% |
|
|
19.2 |
% |
|
|
14.9 |
% |
|
|
17.1 |
% |
Non-GAAP Financial Measure:
EBITDA is defined as consolidated net income before interest expense and income, income taxes, depreciation and amortization. EBITDA is not a measure
determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP. Nevertheless, Graham believes that providing non-GAAP information such as EBITDA is important for investors and other readers of
Grahams financial statements, as it is used as an analytical indicator by Grahams management to better understand operating performance. Grahams credit facility also contains ratios based on EBITDA. Because EBITDA is a non-GAAP
measure and is thus susceptible to varying calculations, EBITDA, as presented, may not be directly comparable to other similarly titled measures used by other companies.
-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
10
of 11
Graham Corporation Second Quarter Fiscal 2016
Additional InformationUnaudited
ORDER & BACKLOG TREND
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q115 6/30/14 |
|
|
Q215 9/30/14 |
|
|
Q315 12/31/14 |
|
|
Q415 3/31/15 |
|
|
FY2015 Total |
|
|
Q116 Total |
|
|
Q216 Total |
|
Orders |
|
$ |
31.1 |
|
|
$ |
35.4 |
|
|
$ |
22.6 |
|
|
$ |
47.4 |
|
|
$ |
136.5 |
|
|
$ |
24.0 |
|
|
$ |
20.6 |
|
Backlog |
|
$ |
114.8 |
|
|
$ |
114.8 |
|
|
$ |
103.8 |
|
|
$ |
113.8 |
|
|
$ |
113.8 |
|
|
$ |
110.1 |
|
|
$ |
108.1 |
|
SALES BY INDUSTRY FY 2016
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2016 |
|
Q1 6/30/15 |
|
|
% of Total |
|
|
Q2 9/30/15 |
|
|
% of Total |
|
Refining |
|
$ |
7.8 |
|
|
|
28 |
% |
|
$ |
7.2 |
|
|
|
32 |
% |
Chemical/Petrochemical |
|
$ |
11.3 |
|
|
|
41 |
% |
|
$ |
7.3 |
|
|
|
32 |
% |
Power |
|
$ |
3.7 |
|
|
|
13 |
% |
|
$ |
3.0 |
|
|
|
13 |
% |
Other Commercial and Industrial* |
|
$ |
4.8 |
|
|
|
18 |
% |
|
$ |
5.3 |
|
|
|
23 |
% |
Total |
|
$ |
27.6 |
|
|
|
|
|
|
$ |
22.8 |
|
|
|
|
|
SALES BY INDUSTRY FY 2015
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2015 |
|
Q1 6/30/14 |
|
|
% of Total |
|
|
Q2 9/30/14 |
|
|
% of Total |
|
|
Q3 12/31/14 |
|
|
% of Total |
|
|
Q4 3/31/15 |
|
|
% of Total |
|
|
FY2015 |
|
|
% of Total |
|
Refining |
|
$ |
6.6 |
|
|
|
23 |
% |
|
$ |
12.3 |
|
|
|
35 |
% |
|
$ |
12.8 |
|
|
|
38 |
% |
|
$ |
11.8 |
|
|
|
32 |
% |
|
$ |
43.5 |
|
|
|
32 |
% |
Chemical/Petrochemical |
|
$ |
11.7 |
|
|
|
41 |
% |
|
$ |
12.9 |
|
|
|
36 |
% |
|
$ |
9.4 |
|
|
|
28 |
% |
|
$ |
13.5 |
|
|
|
36 |
% |
|
$ |
47.5 |
|
|
|
35 |
% |
Power |
|
$ |
4.9 |
|
|
|
17 |
% |
|
$ |
5.6 |
|
|
|
16 |
% |
|
$ |
5.5 |
|
|
|
16 |
% |
|
$ |
3.5 |
|
|
|
9 |
% |
|
$ |
19.5 |
|
|
|
15 |
% |
Other Commercial and Industrial* |
|
$ |
5.3 |
|
|
|
19 |
% |
|
$ |
4.8 |
|
|
|
13 |
% |
|
$ |
5.9 |
|
|
|
18 |
% |
|
$ |
8.7 |
|
|
|
23 |
% |
|
$ |
24.7 |
|
|
|
18 |
% |
Total |
|
$ |
28.5 |
|
|
|
|
|
|
$ |
35.6 |
|
|
|
|
|
|
$ |
33.6 |
|
|
|
|
|
|
$ |
37.5 |
|
|
|
|
|
|
$ |
135.2 |
|
|
|
|
|
* |
Includes the defense industry |
-MORE-
Graham Corporation Reports Fiscal 2016 Second Quarter Results
October 28, 2015
Page
11
of 11
Graham Corporation Second Quarter Fiscal 2016
Additional InformationUnaudited
(Continued)
SALES BY REGION FY 2016
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2016 |
|
Q1 6/30/15 |
|
|
% of Total |
|
|
Q2 9/30/15 |
|
|
% of Total |
|
United States |
|
$ |
17.6 |
|
|
|
64 |
% |
|
$ |
15.2 |
|
|
|
67 |
% |
Middle East |
|
$ |
3.3 |
|
|
|
12 |
% |
|
$ |
3.8 |
|
|
|
17 |
% |
Asia |
|
$ |
2.9 |
|
|
|
11 |
% |
|
$ |
0.8 |
|
|
|
3 |
% |
Other |
|
$ |
3.8 |
|
|
|
13 |
% |
|
$ |
3.0 |
|
|
|
13 |
% |
Total |
|
$ |
27.6 |
|
|
|
|
|
|
$ |
22.8 |
|
|
|
|
|
SALES BY REGION FY 2015
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2015 |
|
Q1 6/30/14 |
|
|
% of Total |
|
|
Q2 9/30/14 |
|
|
% of Total |
|
|
Q3 12/31/14 |
|
|
% of Total |
|
|
Q4 3/31/15 |
|
|
% of Total |
|
|
FY2015 |
|
|
% of Total |
|
United States |
|
$ |
22.2 |
|
|
|
78 |
% |
|
$ |
21.9 |
|
|
|
61 |
% |
|
$ |
18.3 |
|
|
|
55 |
% |
|
$ |
24.0 |
|
|
|
64 |
% |
|
$ |
86.4 |
|
|
|
64 |
% |
Middle East |
|
$ |
1.5 |
|
|
|
5 |
% |
|
$ |
2.0 |
|
|
|
6 |
% |
|
$ |
2.1 |
|
|
|
6 |
% |
|
$ |
4.6 |
|
|
|
12 |
% |
|
$ |
10.2 |
|
|
|
8 |
% |
Asia |
|
$ |
2.4 |
|
|
|
8 |
% |
|
$ |
3.5 |
|
|
|
10 |
% |
|
$ |
2.2 |
|
|
|
7 |
% |
|
$ |
3.1 |
|
|
|
8 |
% |
|
$ |
11.2 |
|
|
|
8 |
% |
Other |
|
$ |
2.4 |
|
|
|
9 |
% |
|
$ |
8.2 |
|
|
|
23 |
% |
|
$ |
11.0 |
|
|
|
32 |
% |
|
$ |
5.8 |
|
|
|
16 |
% |
|
$ |
27.4 |
|
|
|
20 |
% |
Total |
|
$ |
28.5 |
|
|
|
|
|
|
$ |
35.6 |
|
|
|
|
|
|
$ |
33.6 |
|
|
|
|
|
|
$ |
37.5 |
|
|
|
|
|
|
$ |
135.2 |
|
|
|
|
|
-END-
Exhibit 99.2
Graham Corporation 20 Florence Avenue Batavia, NY 14020
IMMEDIATE RELEASE
Graham Corporation
Declares Quarterly Cash Dividend
BATAVIA, NY, October 27, 2015 Graham Corporation (NYSE: GHM), a global business that designs,
manufactures and sells critical equipment for the oil refining, petrochemical, power and defense industries, announced that its Board of Directors, at its regular meeting, declared a quarterly cash dividend of $0.08 per common share.
The dividend will be payable on November 24, 2015 to stockholders of record at the close of business on November 10, 2015. Graham has approximately
10.0 million shares of its common stock outstanding.
ABOUT GRAHAM CORPORATION
Graham is a global business that designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. Energy
markets include oil refining, cogeneration, nuclear and alternative power. For the defense industry, the Companys equipment is used in nuclear propulsion power systems for the U.S. Navy. Grahams global brand is built upon world-renowned
engineering expertise in vacuum and heat transfer technology, responsive and flexible service and unsurpassed quality. Graham designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. The
Company is also a leading nuclear code accredited fabrication and specialty machining company. Graham supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Grahams equipment can also be
found in other diverse applications such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. Grahams reach spans the globe and
its equipment is installed in facilities from North and South America to Europe, Asia, Africa and the Middle East. Graham routinely posts news and other important information on its website, www.graham-mfg.com, where additional comprehensive
information on Graham Corporation and its subsidiaries can be found.
For more information contact:
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Jeffrey F. Glajch |
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Deborah K. Pawlowski / Karen L. Howard |
Vice President - Finance and CFO |
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Kei Advisors LLC |
Phone: (585) 343-2216 |
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Phone: (716) 843-3908 / (716) 843-3942 |
Email: jglajch@graham-mfg.com |
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Email: dpawlowski@keiadvisors.com / khoward@keiadvisors.com |
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