Exhibit 99.1
Graham Corporation 20 Florence Avenue Batavia, NY 14020
Graham Corporation Reports 17.5% Operating Margin on
$16.1 Million in Sales for Second Quarter of Fiscal 2010
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Revenue down 32.6% due to weak refining and petrochemical markets |
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Gross profit held strong at 36.3% |
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Orders of $29.6 million driven by large Middle East refinery projects; backlog moves up to
$50.5 million, but approximately 35% is stretched into late Fiscal 2011 and into Fiscal 2012 |
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Cash balance increases $9.4 million to $54.7 million |
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Revenue guidance tightened to $60 to $65 million as projects shift into Fiscal 2011; Full year gross margin expected to be 33% to 35% |
BATAVIA, NY, October 30, 2009 — Graham Corporation (NYSE Amex: GHM), a designer and manufacturer
of critical equipment for the oil refinery, petrochemical and power industries, today reported its
financial position and results of operations for its second quarter and six months ended September
30, 2009. Graham’s current fiscal year ends March 31, 2010, referred to as “fiscal 2010.”
Net sales were $16.1 million in the fiscal 2010 second quarter, a decline of $7.8 million, or
32.6%, compared with net sales of $23.9 million in the second quarter of the fiscal year which
ended March 31, 2009, referred to as “fiscal 2009”. Net income in the fiscal 2010 second quarter
was $1.5 million, or $0.15 per diluted share, a decline of 66.7% compared with net income of $4.4
million, or $0.43 per diluted share, in the same period last year. Excluding a $0.5 million, or
$0.05 per diluted share, charge associated with previous research and development (R&D) tax credits
and associated interest, net income was $1.9 million, or
$0.19 per diluted share.
Mr. James R. Lines, Graham’s President and Chief Executive Officer, commented, “Sustained weakness
in the U.S. and international refining and petrochemical markets continued to adversely impact our
revenue during the quarter. However, our gross margin remained relatively high due both to prudent
procurement practices designed to take advantage of lower material costs stemming from
recession-driven reductions in component and commodity prices as well as, to a lesser degree, the
fact that certain of the quarter’s shipments were for orders received near the peak of the prior
energy demand cycle.”
U.S. sales declined $6.8 million, or 45.8%, to $8.1 million, representing 50% of total sales in the
second quarter of fiscal 2010. By comparison, U.S. sales were $15.0 million, representing 63% of
total sales, in the same quarter of fiscal 2009. International sales during the second quarter
were $8.0 million, representing 50% of total sales, down from $8.9 million, or 37% of total sales,
during the same quarter of fiscal 2009. Sales to Asia increased appreciably, but were more than
offset by declines in sales to all other regions, with the largest sales decreases occurring in
Canada and Western Europe.
In Graham’s leading industries, 44% of sales in the second quarter were to the refining industry,
compared with 47% of sales in the same period of the prior fiscal year, and approximately 33%
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Graham Corporation Reports 17.5% Operating Margin on $16.1 Million in Sales
for Second Quarter Fiscal 2010
October 30, 2009
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of sales were to the chemical/petrochemical industry during the second quarter, compared with 27%
in the second quarter of fiscal 2009.
Fluctuations in Graham’s 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 Graham believes are more
visible on a trailing 12-month basis. Nevertheless, Graham expects that international sales will
comprise a larger portion of future revenue both for the remainder of the current fiscal year and
beyond.
Strong Margin Driven by Reduced Material Costs
Gross profit was $5.9 million, or 36.3% of sales, in the second quarter of fiscal 2010, compared
with $10.5 million, or 43.9% of sales, in the same period of the prior fiscal year. During the
quarter, gross profit remained at a relatively high level compared with historic quarterly gross
margins at this revenue level due primarily to material cost savings as well as to the fact that
certain orders completed during the quarter originated prior to the sharp reduction in market
demand which commenced in the quarter ended December 31, 2008. Offsetting these positive impacts
were sales volume declines and product mix changes
Selling, general and administrative (“SG&A”) expenses in the second quarter declined to $3.0
million, or 18.8% of sales, compared with $3.9 million, or 16.4% of sales, in the second quarter of
fiscal 2009. The decrease in SG&A expenses in the current year’s second quarter compared with the
same quarter of fiscal 2009 was a result of decreased variable costs, such as commissions, related
to the decline in sales, as well as to lower salaries and benefits reflecting the affect of the
restructuring implemented by Graham in the fourth quarter of fiscal 2009. The restructuring
measures taken in the fourth quarter of fiscal 2009 has produced approximately $2.7 million in
annualized savings. During the second quarter of fiscal 2010, Graham further restructured the
Company and recorded a charge of $0.1 million for additional severance costs which are expected to
generate additional annualized savings of approximately $1.6 million beginning in the third quarter
of fiscal 2010.
Mr. Lines noted, “Given our expectations for the next several quarters, we took additional
restructuring steps in September, including a further headcount reduction of approximately 7%.
Restructuring was accomplished both with production personnel and our indirect staff, and we
believe that we still have sufficient staffing necessary to flex for capacity fluctuations, which
we continue to expect. Our estimated savings from this restructuring is expected to impact
manufacturing costs more than SG&A.”
Interest income in the second quarter of fiscal 2010 declined to $15 thousand compared with
$172 thousand in the same period of the prior fiscal year, primarily as a result of a significant
decline in current U.S. Treasury yields compared with a year ago.
Graham’s effective tax rate was 45.8% in the second quarter of fiscal 2010. The rate includes $0.4
million associated with a charge for certain R&D tax credits claimed for the tax years 2006 through
2008. Excluding this charge, the effective tax rate would have been 29.4%. This compares with an
effective tax rate of 34.5% for the second quarter of fiscal 2009 and 34.7% for full-year fiscal
2009. Excluding the charge, the effective tax rate for fiscal 2010 is expected to be 30% to 31%.
Strong First Half of Fiscal 2010 Expected to be Balanced with Weaker Second Half
Net sales for the first six months of fiscal 2010 were $36.2 million, a decline of $15.3 million,
or 29.7%, compared with net sales of $51.6 million in the first six months of fiscal 2009. U.S.
sales represented 51% of sales for the first six months of fiscal 2010, compared with 65% in fiscal
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Graham Corporation Reports 17.5% Operating Margin on $16.1 Million in Sales
for Second Quarter Fiscal 2010
October 30, 2009
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2009, while International sales were 49% of sales during the period, compared with 35% last year.
Sales to Asia advanced strongly while sales to all other regions declined.
Sales to the refining industry accounted for 45% of revenue in the first six months of fiscal 2010,
down from 50% in same period of fiscal 2009. Chemical/petrochemical sales were 28% of revenue,
compared with 23% last year, and 27% of fiscal 2010 six-month sales were to other industrial
applications, unchanged from the same period in the fiscal 2009.
SG&A expenses were $6.3 million, or 17.3% of sales, in the fiscal 2010 six-month period compared
with $7.8 million, or 15.0% of sales, in the first six months of fiscal 2009. The decrease in
absolute dollars was due primarily to reduced commissions on lower sales as well as to the effects
of the Company’s restructuring initiatives. Graham expects that SG&A will be in the range of $12.5
to $13.0 million for full-year fiscal 2010 as variable costs such as commissions are expected to
adjust based on the geographic location of sales.
Strong Balance Sheet with Significant Cash Position
Cash, cash equivalents and investments at September 30, 2009, were $54.7 million compared with
$45.3 million at June 30, 2009 and $46.2 million at March 31, 2009. The increase resulted
primarily from the timing of accounts receivable. Approximately $50.1 million was invested in U.S.
Treasury notes with maturity periods of 91 to 180 days at September 30, 2009. As of September 30,
2009, Graham had no borrowings against its $30.0 million revolving line of credit facility.
Net cash provided by operating activities for the second quarter of fiscal 2010 was $9.8 million,
compared with $2.5 million in net cash used in operating activities in the prior year’s second
quarter. The increase was a result of the timing of receivables and the impact of a $3.6 million
pension contribution that was made in last year’s quarter. For the first six months of fiscal
2010, cash provided by operations was $9.3 million compared with $4.4 million in cash provided by
operations in the comparable fiscal 2009 period.
Capital expenditures were $202 thousand in the second quarter and $282 thousand for the first six
months of fiscal 2010, compared with $576 thousand for the second quarter and
$795 thousand for the first six months of fiscal 2009. Capital expenditures in fiscal 2010 are
expected to aggregate approximately $1.0 million, of which approximately 65% are planned to be used
for machinery and equipment, 28% are planned to be used for information technology and 7% for other
anticipated expenditures. Approximately 50% of Graham’s planned capital expenditures for fiscal
2010 are associated with productivity improvements and the balance for capitalized maintenance and
other general purposes.
Strengthened Backlog Extends into Fiscal 2012
Orders during the second quarter of fiscal 2010 were $29.6 million compared with orders of $17.5
million and $8.8 million in the prior year’s second quarter and the trailing first quarter of
fiscal 2010, respectively. Included in orders in the fiscal 2010 second quarter were orders
related to increased refinery activity in the Middle East. International orders were $23.4
million, or 79% of total orders, while domestic orders were $6.2 million, or 21% of total orders.
This compares with last year’s second quarter domestic orders of $9.1 million and international
orders of $8.3 million, 52% and 48% of total orders, respectively.
Graham’s backlog was $50.5 million at September 30, 2009, down 27.6% from $69.7 million at
the end of last year’s fiscal second quarter, but 36.2% above backlog of $37.0 million at June 30,
2009. At September 30, 2009, there were four orders in backlog with a value of $7.0 million
remaining on hold. During the fiscal 2010 second quarter, a $3.3 million order that was scheduled
to ship by the end of fiscal 2010 was put on hold and is now expected to ship in the first half of
fiscal 2011, while a $0.5 million order that was previously put on hold was cancelled.
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Graham Corporation Reports 17.5% Operating Margin on $16.1 Million in Sales
for Second Quarter Fiscal 2010
October 30, 2009
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Approximately 55% of projects in Graham’s backlog as of the end of the second quarter are for
refinery projects, 33% for chemical and petrochemical projects and 12% for power and other
industrial commercial applications, compared with 51%, 31% and 18%, respectively, at September 30,
2008. The large refinery order received in the second quarter is not expected to be delivered
until the latter half of fiscal 2011 and into fiscal 2012. Consequently, Graham expects only about
65% of its current backlog to ship in the next twelve months as opposed to the typical 85% to 90%
of backlog that would normally ship in the twelve-month period.
Mr. Lines concluded, “Although we recorded the highest level of orders since the fourth quarter of
fiscal 2008, our markets remain erratic and we may not begin to return to a normalized level of
orders for several quarters. Based on the delay in shipment until next fiscal year of a
$3.3 million order, we now believe our fiscal 2010 revenue will be from $60 to $65 million, or at
the lower end of our projected range. Yet, given the strength of the first half of the year,
full-year gross margin is expected to be in the range of 33% to 35%.
“Our strategy is to grow beyond our recent historic record level of revenue by capturing a greater
percentage of the market through investments in customer relationships and personnel that we are
making during this recession, by expanding our product line and markets through acquisitions, and
by taking advantage of growth opportunities in emerging markets. Our acquisition strategy targets
companies with engineered-to-order products for the energy industries that can either expand
Graham’s geographic footprint or expand our product offerings.”
Stock Buyback Program
Graham maintains a stock repurchase program which permits it to repurchase up to one million shares
of its common stock through July 30, 2010. Since the initiation of the program in January 2009,
Graham has repurchased 303,000 shares at a cost of $2.5 million. There were no repurchases of
shares during the second quarter of fiscal 2010.
Webcast and Conference Call
Graham will host a conference call and live webcast today at 11:00 a.m. Eastern Time. During the
conference call and webcast, James R. Lines, President and Chief Executive Officer, and Jeffrey
Glajch, Vice President — Finance & Administration and Chief Financial Officer, will review Graham’s
financial and operating results for the second quarter of fiscal 2010 as well as Graham’s strategy
and outlook. A question-and-answer session will follow.
Graham’s conference call and live webcast can be accessed as follows:
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The live webcast can be found at http://www.graham-mfg.com. Participants should
go to the website 10 -15 minutes prior to the scheduled conference in order to
register and download any necessary audio software. |
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The teleconference can be accessed by dialling 1-201-689-8560 and referencing
conference ID number 334947 approximately 5 — 10 minutes prior to the call. |
The conference call and webcast will be archived and can be reviewed as follows:
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The webcast will be archived at http://www.graham-mfg.com and a transcript will
be posted, once available. The webcast and transcript will remain available on
Graham’s website for approximately 30 days. |
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A telephonic replay can be heard by calling 1-201-612-7415, and entering account
number 3055 and conference ID number 334947. The replay will be available from
2:00 p.m. on October 30, 2009, through November 6, 2009, at 11:59 p.m. Eastern
Time. |
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Graham Corporation Reports 17.5% Operating Margin on $16.1 Million in Sales
for Second Quarter Fiscal 2010
October 30, 2009
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ABOUT GRAHAM CORPORATION
With world-renowned engineering expertise in vacuum and heat transfer technology, Graham
Corporation is a global designer, manufacturer and supplier of ejectors, pumps, condensers, vacuum
systems and heat exchangers. For over 70 years, Graham has built a reputation for top quality,
reliable products and high-standards of customer service. Sold either as components or complete
system solutions, the principal markets for Graham’s equipment are the petrochemical, oil refining
and electric power generation industries, including cogeneration and geothermal plants. Graham’s
equipment can be found in diverse applications, such as metal refining, pulp and paper processing,
ship-building, water heating, refrigeration, desalination, food processing, pharmaceutical,
heating, ventilating and air conditioning.
Graham Corporation’s reach spans the globe. 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 the Company can be found.
Safe Harbor Regarding Forward Looking Statements
This press 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,” “projects,” “anticipates,” “believes,” “could,” 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,
statements relating to anticipated revenues, profit margins, foreign sales operations, its strategy
to build its global sales representative channel, the effectiveness of automation in expanding its
engineering capacity, its ability to improve cost competitiveness, customer preferences, changes in
market conditions in the industries in which it operates, changes in general economic conditions
and customer behavior and its acquisition strategy 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 Corporation’s most recent
Annual and Quarterly Reports 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
Corporation’s underlying assumptions prove incorrect, actual results may vary materially from those
currently anticipated. In addition, undue reliance should not be placed on Graham Corporation’s
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 press release.
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For more information contact: |
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Jeffrey Glajch, Vice President — Finance and CFO
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Deborah K. Pawlowski, Kei Advisors LLC |
Phone: (585) 343-2216
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Phone: (716) 843-3908 |
Email: jglajch@graham-mfg.com
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Email: dpawlowski@keiadvisors.com |
FINANCIAL TABLES FOLLOW.
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Graham Corporation Reports 17.5% Operating Margin on $16.1 Million in Sales
for Second Quarter Fiscal 2010
October 30, 2009
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Graham Corporation Second Quarter Fiscal 2010
Consolidated Statements of Operations and Retained Earnings
(Amounts in thousands, except per share data)
(Unaudited)
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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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2009 |
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2008 |
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2009 |
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2008 |
|
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|
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|
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Net sales |
|
$ |
16,108 |
|
|
$ |
23,915 |
|
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$ |
36,246 |
|
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$ |
51,562 |
|
Cost of products sold |
|
|
10,254 |
|
|
|
13,416 |
|
|
|
22,114 |
|
|
|
28,845 |
|
|
|
|
|
|
|
|
|
|
|
|
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Gross profit |
|
|
5,854 |
|
|
|
10,499 |
|
|
|
14,132 |
|
|
|
22,717 |
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|
|
|
|
|
|
|
|
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|
Gross profit margin |
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36.3 |
% |
|
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43.9 |
% |
|
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39.0 |
% |
|
|
44.1 |
% |
Other expenses: |
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|
|
|
|
|
|
|
|
|
|
|
|
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Selling, general and administrative |
|
|
3,032 |
|
|
|
3,931 |
|
|
|
6,280 |
|
|
|
7,753 |
|
|
|
|
|
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|
|
|
|
|
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Operating profit |
|
|
2,822 |
|
|
|
6,568 |
|
|
|
7,852 |
|
|
|
14,964 |
|
Operating profit margin |
|
|
17.5 |
% |
|
|
27.5 |
% |
|
|
21.7 |
% |
|
|
29.0 |
% |
Interest income |
|
|
(15 |
) |
|
|
(172 |
) |
|
|
(33 |
) |
|
|
(303 |
) |
Interest expense |
|
|
33 |
|
|
|
2 |
|
|
|
34 |
|
|
|
3 |
|
Other expense |
|
|
96 |
|
|
|
— |
|
|
|
96 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expenses and income |
|
|
3,146 |
|
|
|
3,761 |
|
|
|
6,377 |
|
|
|
7,453 |
|
|
|
|
|
|
|
|
|
|
|
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Income before income taxes |
|
|
2,708 |
|
|
|
6,738 |
|
|
|
7,755 |
|
|
|
15,264 |
|
Provision for income taxes |
|
|
1,240 |
|
|
|
2,326 |
|
|
|
2,769 |
|
|
|
5,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income |
|
|
1,468 |
|
|
|
4,412 |
|
|
|
4,986 |
|
|
|
10,096 |
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Retained earnings at beginning of period |
|
|
57,287 |
|
|
|
42,786 |
|
|
|
53,966 |
|
|
|
37,216 |
|
Dividends |
|
|
(197 |
) |
|
|
(203 |
) |
|
|
(394 |
) |
|
|
(354 |
) |
Effect of adoption of measurement date
provisions of Statement of Financial
Accounting Standards No. 158 |
|
|
— |
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|
|
— |
|
|
|
— |
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|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
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|
Retained earnings at end of period |
|
$ |
58,558 |
|
|
$ |
46,995 |
|
|
$ |
58,558 |
|
|
$ |
46,995 |
|
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|
|
|
|
|
|
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Per share data: |
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Basic: |
|
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|
|
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|
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Net income |
|
$ |
.15 |
|
|
$ |
.43 |
|
|
$ |
.50 |
|
|
$ |
1.00 |
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Diluted: |
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|
|
|
|
|
|
|
|
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Net income |
|
$ |
.15 |
|
|
$ |
.43 |
|
|
$ |
.50 |
|
|
$ |
.99 |
|
|
|
|
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|
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|
|
|
|
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|
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Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic: |
|
|
9,903 |
|
|
|
10,169 |
|
|
|
9,894 |
|
|
|
10,127 |
|
Diluted: |
|
|
9,937 |
|
|
|
10,249 |
|
|
|
9,926 |
|
|
|
10,227 |
|
|
|
|
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Dividends declared per share |
|
$ |
.02 |
|
|
$ |
.02 |
|
|
$ |
.04 |
|
|
$ |
.035 |
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Graham Corporation Reports 17.5% Operating Margin on $16.1 Million in Sales
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Page 7 |
for Second Quarter Fiscal 2010 |
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October 30, 2009 |
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Graham Corporation Second Quarter Fiscal 2010
Consolidated Balance Sheets
(Amounts in thousands, except per share data)
(Unaudited)
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September 30, |
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March 31, |
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2009 |
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2009 |
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Assets |
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|
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Current assets: |
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|
|
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Cash and cash equivalents |
|
$ |
4,640 |
|
|
$ |
5,150 |
|
Investments |
|
|
50,063 |
|
|
|
41,059 |
|
Trade accounts receivable, net of allowances ($28 and $39 at
September 30, and March 31, 2009, respectively) |
|
|
8,207 |
|
|
|
6,995 |
|
Unbilled revenue |
|
|
5,555 |
|
|
|
10,444 |
|
Inventories |
|
|
3,646 |
|
|
|
4,665 |
|
Income taxes receivable |
|
|
1,868 |
|
|
|
4,054 |
|
Prepaid expenses and other current assets |
|
|
656 |
|
|
|
375 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
74,635 |
|
|
|
72,742 |
|
Property, plant and equipment, net |
|
|
9,523 |
|
|
|
9,645 |
|
Deferred income tax asset |
|
|
196 |
|
|
|
224 |
|
Prepaid pension asset |
|
|
4,423 |
|
|
|
4,300 |
|
Other assets |
|
|
7 |
|
|
|
13 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
88,784 |
|
|
$ |
86,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of capital lease obligations |
|
$ |
28 |
|
|
$ |
28 |
|
Accounts payable |
|
|
5,483 |
|
|
|
5,514 |
|
Accrued compensation |
|
|
3,649 |
|
|
|
4,630 |
|
Accrued expenses and other liabilities |
|
|
1,926 |
|
|
|
2,266 |
|
Customer deposits |
|
|
4,055 |
|
|
|
5,892 |
|
Deferred income tax liability |
|
|
4,953 |
|
|
|
4,865 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
20,094 |
|
|
|
23,195 |
|
|
|
|
|
|
|
|
|
|
Capital lease obligations |
|
|
17 |
|
|
|
31 |
|
Accrued compensation |
|
|
274 |
|
|
|
250 |
|
Deferred income tax liability |
|
|
1,356 |
|
|
|
1,253 |
|
Accrued pension liability |
|
|
251 |
|
|
|
256 |
|
Accrued postretirement benefits |
|
|
843 |
|
|
|
828 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
22,835 |
|
|
|
25,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $1.00 par value
Authorized, 500 shares |
|
|
|
|
|
|
|
|
Common stock, $.10 par value
Authorized, 25,500 shares
Issued, 10,150 and 10,127 shares at September 30 and
March 31, 2009, respectively |
|
|
1,015 |
|
|
|
1,013 |
|
Capital in excess of par value |
|
|
15,174 |
|
|
|
14,923 |
|
Retained earnings |
|
|
58,558 |
|
|
|
53,966 |
|
Accumulated other comprehensive loss |
|
|
(6,240 |
) |
|
|
(6,460 |
) |
Treasury stock (305 and 279 shares at September 30 and
March 31, 2009, respectively) |
|
|
(2,554 |
) |
|
|
(2,325 |
) |
Notes receivable |
|
|
(4 |
) |
|
|
(6 |
) |
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
65,949 |
|
|
|
61,111 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
88,784 |
|
|
$ |
86,924 |
|
|
|
|
|
|
|
|
-MORE-
| |
|
|
Graham Corporation Reports 17.5% Operating Margin on $16.1 Million in Sales
|
|
Page 8 |
for Second Quarter Fiscal 2010 |
|
|
October 30, 2009 |
|
|
Graham Corporation Second Quarter Fiscal 2010
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
Six Months Ended |
|
| |
|
September 30, |
|
| |
|
2009 |
|
|
2008 |
|
Operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
4,986 |
|
|
$ |
10,096 |
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
840 |
|
|
|
530 |
|
Discount accretion on investments |
|
|
(30 |
) |
|
|
(293 |
) |
Stock-based compensation expense |
|
|
198 |
|
|
|
257 |
|
Loss (gain) on disposal of property, plant and equipment |
|
|
3 |
|
|
|
(1 |
) |
Deferred income taxes |
|
|
98 |
|
|
|
1,267 |
|
(Increase) decrease in operating assets: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,212 |
) |
|
|
(3,591 |
) |
Unbilled revenue |
|
|
4,892 |
|
|
|
2,864 |
|
Inventories |
|
|
1,018 |
|
|
|
(1,236 |
) |
Income taxes receivable/payable |
|
|
2,185 |
|
|
|
(1,277 |
) |
Prepaid expenses and other current and non-current assets |
|
|
(281 |
) |
|
|
(117 |
) |
Prepaid pension asset |
|
|
(122 |
) |
|
|
(3,574 |
) |
Increase (decrease) in operating liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
(134 |
) |
|
|
(18 |
) |
Accrued compensation, accrued expenses and other current and non-current
liabilities |
|
|
(1,323 |
) |
|
|
(176 |
) |
Customer deposits |
|
|
(1,838 |
) |
|
|
(379 |
) |
Long-term portion of accrued compensation, accrued pension liability
and accrued postretirement benefits |
|
|
34 |
|
|
|
50 |
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
9,314 |
|
|
|
4,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(282 |
) |
|
|
(795 |
) |
Proceeds from sale of property, plant and equipment |
|
|
7 |
|
|
|
1 |
|
Purchase of investments |
|
|
(86,613 |
) |
|
|
(61,437 |
) |
Redemption of investments at maturity |
|
|
77,640 |
|
|
|
58,600 |
|
|
|
|
|
|
|
|
Net cash used by investing activities |
|
|
(9,248 |
) |
|
|
(3,631 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
|
198 |
|
|
|
2,450 |
|
Principal repayments on long-term debt |
|
|
(211 |
) |
|
|
(2,464 |
) |
Issuance of common stock |
|
|
34 |
|
|
|
695 |
|
Dividends paid |
|
|
(394 |
) |
|
|
(354 |
) |
Purchase of treasury stock |
|
|
(229 |
) |
|
|
(14 |
) |
Excess tax deduction on stock awards |
|
|
21 |
|
|
|
1,696 |
|
Other |
|
|
2 |
|
|
|
2 |
|
|
|
|
|
|
|
|
Net cash (used) provided by financing activities |
|
|
(579 |
) |
|
|
2,011 |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
3 |
|
|
|
150 |
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
(510 |
) |
|
|
2,932 |
|
Cash and cash equivalents at beginning of period |
|
|
5,150 |
|
|
|
2,112 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
4,640 |
|
|
$ |
5,044 |
|
|
|
|
|
|
|
|
-MORE-
| |
|
|
Graham Corporation Reports 17.5% Operating Margin on $16.1 Million in Sales
|
|
Page 9 |
for Second Quarter Fiscal 2010 |
|
|
October 30, 2009 |
|
|
Graham Corporation Second Quarter Fiscal 2010
Additional Information
ORDER AND BACKLOG TREND
(Amounts in millions)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Q109 |
|
Q209 |
|
Q309 |
|
Q409 |
|
FY2009 |
|
Q110 |
|
Q210 |
| |
|
6/30/08 |
|
9/30/08 |
|
12/31/08 |
|
3/31/09 |
|
3/31/09 |
|
6/30/09 |
|
9/30/09 |
Orders |
|
$ |
27.8 |
|
|
$ |
17.5 |
|
|
$ |
8.1 |
|
|
$ |
20.5 |
|
|
$ |
73.9 |
|
|
$ |
8.8 |
|
|
$ |
29.6 |
|
Backlog |
|
$ |
76.0 |
|
|
$ |
69.7 |
|
|
$ |
52.5 |
|
|
$ |
48.3 |
|
|
$ |
48.3 |
|
|
$ |
37.0 |
|
|
$ |
50.5 |
|
SALES BY INDUSTRY — FISCAL 2010
(Amounts in millions)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Q110 |
|
% |
|
Q210 |
|
% |
| |
|
6/30/09 |
|
Total |
|
9/30/09 |
|
Total |
Refining |
|
$ |
9.2 |
|
|
|
46 |
% |
|
$ |
7.1 |
|
|
|
44 |
% |
Chemical/
Petrochemical |
|
$ |
4.7 |
|
|
|
24 |
% |
|
$ |
5.3 |
|
|
|
33 |
% |
Power |
|
$ |
0.1 |
|
|
|
N/A |
|
|
$ |
0.1 |
|
|
|
1 |
% |
Other |
|
$ |
6.1 |
|
|
|
30 |
% |
|
$ |
3.6 |
|
|
|
22 |
% |
Total |
|
$ |
20.1 |
|
|
|
|
|
|
$ |
16.1 |
|
|
|
|
|
SALES BY INDUSTRY — FISCAL 2009
(Amounts in millions)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Q109 |
|
% |
|
Q209 |
|
% |
|
Q309 |
|
% |
|
Q409 |
|
% |
|
FY2009 |
|
% |
| |
|
6/30/08 |
|
Total |
|
9/30/08 |
|
Total |
|
12/31/08 |
|
Total |
|
3/31/09 |
|
Total |
|
3/31/09 |
|
Total |
Refining |
|
$ |
14.4 |
|
|
|
52 |
% |
|
$ |
11.1 |
|
|
|
47 |
% |
|
$ |
11.3 |
|
|
|
46 |
% |
|
$ |
9.3 |
|
|
|
37 |
% |
|
$ |
46.0 |
|
|
|
46 |
% |
Chemical/
Petrochemical |
|
$ |
5.3 |
|
|
|
19 |
% |
|
$ |
6.4 |
|
|
|
27 |
% |
|
$ |
6.6 |
|
|
|
27 |
% |
|
$ |
8.7 |
|
|
|
35 |
% |
|
$ |
27.0 |
|
|
|
27 |
% |
Power |
|
$ |
1.3 |
|
|
|
5 |
% |
|
$ |
2.0 |
|
|
|
8 |
% |
|
$ |
1.5 |
|
|
|
6 |
% |
|
$ |
0.6 |
|
|
|
3 |
% |
|
$ |
5.5 |
|
|
|
5 |
% |
Other |
|
$ |
6.6 |
|
|
|
24 |
% |
|
$ |
4.4 |
|
|
|
18 |
% |
|
$ |
5.3 |
|
|
|
21 |
% |
|
$ |
6.2 |
|
|
|
25 |
% |
|
$ |
22.6 |
|
|
|
22 |
% |
Total |
|
$ |
27.6 |
|
|
|
|
|
|
$ |
23.9 |
|
|
|
|
|
|
$ |
24.7 |
|
|
|
|
|
|
$ |
24.8 |
|
|
|
|
|
|
$ |
101.1 |
|
|
|
|
|
| |
|
|
Graham Corporation Reports 17.5% Operating Margin on $16.1 Million in Sales
|
|
Page 10 |
for Second Quarter Fiscal 2010 |
|
|
October 30, 2009 |
|
|
SALES BY REGION — FISCAL 2010
(Amounts in millions)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Q110 |
|
% |
|
Q210 |
|
% |
| |
|
6/30/09 |
|
Total |
|
9/30/09 |
|
Total |
United States |
|
$ |
10.2 |
|
|
|
51 |
% |
|
$ |
8.1 |
|
|
|
50 |
% |
Middle East |
|
$ |
0.4 |
|
|
|
2 |
% |
|
$ |
2.9 |
|
|
|
18 |
% |
Asia |
|
$ |
8.2 |
|
|
|
41 |
% |
|
$ |
4.0 |
|
|
|
25 |
% |
Other |
|
$ |
1.3 |
|
|
|
6 |
% |
|
$ |
1.1 |
|
|
|
7 |
% |
Total |
|
$ |
20.1 |
|
|
|
|
|
|
$ |
16.1 |
|
|
|
|
|
SALES BY REGION — FISCAL 2009
(Amounts in millions)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Q109 |
|
% |
|
Q209 |
|
% |
|
Q309 |
|
% |
|
Q409 |
|
% |
|
FY2009 |
|
% |
| |
|
6/30/08 |
|
Total |
|
9/30/08 |
|
Total |
|
12/31/08 |
|
Total |
|
3/31/09 |
|
Total |
|
3/31/09 |
|
Total |
United States |
|
$ |
18.6 |
|
|
|
67 |
% |
|
$ |
15.0 |
|
|
|
63 |
% |
|
$ |
14.4 |
|
|
|
58 |
% |
|
$ |
15.8 |
|
|
|
64 |
% |
|
$ |
63.7 |
|
|
|
63 |
% |
Middle East |
|
$ |
2.0 |
|
|
|
7 |
% |
|
$ |
3.0 |
|
|
|
13 |
% |
|
$ |
2.8 |
|
|
|
11 |
% |
|
$ |
0.6 |
|
|
|
2 |
% |
|
$ |
8.4 |
|
|
|
8 |
% |
Asia |
|
$ |
3.0 |
|
|
|
11 |
% |
|
$ |
1.0 |
|
|
|
4 |
% |
|
$ |
3.7 |
|
|
|
15 |
% |
|
$ |
5.5 |
|
|
|
22 |
% |
|
$ |
13.3 |
|
|
|
13 |
% |
Other |
|
$ |
4.0 |
|
|
|
15 |
% |
|
$ |
4.9 |
|
|
|
20 |
% |
|
$ |
3.8 |
|
|
|
16 |
% |
|
$ |
2.9 |
|
|
|
12 |
% |
|
$ |
15.7 |
|
|
|
16 |
% |
Total |
|
$ |
27.6 |
|
|
|
|
|
|
$ |
23.9 |
|
|
|
|
|
|
$ |
24.7 |
|
|
|
|
|
|
$ |
24.8 |
|
|
|
|
|
|
$ |
101.1 |
|
|
|
|
|
-END-
