Exhibit 99.1
|
|
|
| |
|
|
|
|
News
Release |
Graham Corporation 20 Florence Avenue Batavia, NY 14020
IMMEDIATE RELEASE
Graham Corporation Net Income Increased 23% on 9% Growth in Revenue for Fourth Quarter Fiscal 2008
| |
• |
|
Fourth quarter sales were $22.8 million; sales increased 31% to $86.4 million for fiscal 2008 |
| |
| |
• |
|
Earnings per diluted share were $0.83 for fourth quarter and $2.98 for fiscal 2008 |
| |
| |
• |
|
Fourth quarter gross profit was 39.3%; gross profit increased to 39.5% in fiscal 2008 |
| |
| |
• |
|
Strong backlog of $75.7 million at fiscal year-end |
| |
| |
• |
|
Graham achieves new records in revenue, net income, bookings and backlog |
BATAVIA, NY, May 30, 2008 — Graham Corporation (AMEX: GHM), an equipment manufacturer critical to
the oil refinery, petrochemical and power industries, today reported financial results for its
fourth quarter and fiscal year ended March 31, 2008. All per share amounts contained in this press
release have been adjusted to reflect a five-for-four stock split
which was distributed on or about January 3, 2008.
Revenue grew $1.9 million to $22.8 million for the fourth quarter of fiscal 2008 compared with
revenue of $20.8 million in the fourth quarter of the fiscal year ended March 31, 2007. Fiscal
2008 revenue was $86.4 million, and it was the fourth consecutive fiscal year that the Company
achieved double digit revenue growth. Revenue for fiscal 2008 increased 31.3% when compared with
revenue of $65.8 million for fiscal 2007.
Fourth quarter fiscal 2008 net income was $4.2 million, up 22.7% compared with net income of
$3.4 million in the same period the prior year. On a per diluted share basis, net income increased
20.3% to $0.83 per diluted share compared with $0.69 per diluted share in the fourth quarter of
fiscal 2007. In fiscal 2008, net income was $15.0 million, or $2.98 per diluted share, compared
with $5.8 million, or $1.17 per diluted share, in fiscal 2007. Included in fourth quarter fiscal
2007 net income was the recognition of a research and development tax credit of $1.4 million, or
$0.33 per diluted share, compared with $234 thousand, or $0.05 per diluted share, in the fourth
quarter of fiscal 2008. Excluding the tax credit, net income was $2.0 million for the fourth
quarter of fiscal 2007 and $4.4 million, or $0.89 per diluted share, for fiscal 2007.
Mr. James R. Lines, President and Chief Executive Officer of Graham, commented, “Our vision is to
be a world-class leader in the design and manufacture of engineered-to-order products for the
process industries. Fiscal 2008 reflects our efforts in achieving our vision. Beyond strong
markets and significant demand for the products we manufacture, our growth reflects the recognition
by our customers of the value we bring in the form of solutions, quality and reliability.”
Growth in condenser and aftermarket sales contributed to the increase in sales in the fourth
quarter of fiscal 2008 when compared with the same period the prior year, while sales of ejector
systems declined. Fluctuations among products can vary based on the timing of customer projects
around the world as well as on business cycles of the industries we serve.
Mr. Lines continued, “The investments being made around the world in refineries and petrochemical
plants are planned to remain at very high levels as a result of rapidly growing economies in Asia,
India,
- MORE -
Page 2
Graham Corporation Net Income Increases 23% on 9% Growth in Revenue for Fourth Quarter Fiscal 2008 May 30, 2008
South America and Eastern Europe. We continue to have large volume of inquiries and do not believe
this cycle will deteriorate anytime in the near future. It’s critical to our growth strategy to
understand that we do not intend to just capitalize on the market potential available to us now,
but that we are laying the groundwork we believe will allow us to capture greater share in other
markets such as alternative energy or in Asia as those industries grow.”
In the fourth quarter of fiscal 2008, condenser sales were $6.8 million, or 30% of total sales,
compared with $4.0 million, or 19% of total sales, in the same period the prior year. Aftermarket
sales were $5.2 million, or 23% of sales, in the fourth quarter of fiscal 2008 compared with $3.1 million, or
15% of sales, in the fourth quarter of fiscal 2007. Aftermarket sales were higher than the
historical 15% of total sales as a result of the recognition of revenue from a large capital order
won in the second quarter of fiscal 2008. Ejector system sales were $6.3 million in the fourth
quarter of fiscal 2008, or 28% of total sales, compared with $8.3 million, or 40% of sales, in the
same period the prior year.
Domestic sales contributed 50% of total sales in the fourth quarter of fiscal 2008 compared with
56% in the fourth quarter of fiscal 2007. Sales to the Middle East, Asia and South America were
the largest contributors behind U.S. sales.
By industry, sales in the fourth quarter of fiscal 2008 were 33% to the refining industry, 32% to
the chemical and petrochemical industries and 35% to other industrial applications compared with
36% to the refining industry, 37% to the chemical and petrochemical industry, and 27% to other
industrial applications in the fourth quarter of fiscal 2007. Additional historical information
regarding sales by industry and region are contained in the tables at the end of this press
release.
Costs and expenses
Gross profit in the fourth quarter of fiscal 2008 was $8.9 million, or 39.3% of sales, compared
with $6.1 million, or 29.2% of sales, in the same period the prior year. Gross profit was $34.2
million, or 39.5% of sales, in fiscal 2008 compared with $16.8, or 25.6% of sales, in fiscal 2007.
The quarter-over-quarter and year-over-year improvements were achieved through operating efficiency
gains in both engineering and manufacturing, improved operating leverage as well as greater
selectivity in order acceptance. Approximately 5% of manufacturing production hours were
outsourced in the fourth quarter of fiscal 2008 and 9% to 10% in the full fiscal year.
Selling, general and administrative (“SG&A”) expenses were $3.3 million, or 15% of sales, in the
fourth quarter of fiscal 2008 compared with $3.4 million, or 16% of sales, in the same period the
prior year. SG&A expenses were $13.1 million, or 15.1% of sales, in fiscal 2008 compared with
$10.8 million, or 16.4% of sales, in fiscal 2007. The absolute dollar increases were due to higher
variable costs, such as sales commission and incentive compensation, as a result of the higher
sales volume and net income.
Operating margin was 24.7% in the fourth quarter of fiscal 2008 compared with 13.1% in the same
period the prior year. Fiscal 2008 operating margin was 24.4% compared with 9.1% in fiscal 2007.
Higher sales and operating leverage gains contributed to the improvement quarter-over-quarter and
year-over-year.
Mr. Lines stated, “Capital investments made over the last two years to improve productivity, expand
capacity and shorten lead times has produced benefits already, as was evidenced by our fiscal year
2008 operating performance. We believe there is still significantly more we can do to improve
operating performance and expand production capacity.”
Interest income for the fourth quarter of fiscal 2008 was $227 thousand compared with $160 thousand
in the same period the prior year. Fiscal 2008 interest income was $1.0 million, an increase
compared with $516 thousand in fiscal 2007 as a result of a 144% increase in investments.
The effective tax rate was 28.3% in the fourth quarter of fiscal 2008 compared with a tax benefit
of 18.6% in the same period the prior year. The effective tax rate for fiscal 2008 was 32%
compared with 12% for fiscal 2007. The fiscal 2007 tax rate reflects the benefit of a $1.6 million
research and
- MORE -
Page 3
Graham Corporation Net Income Increases 23% on 9% Growth in Revenue for Fourth Quarter Fiscal 2008 May 30, 2008
development (“R&D”) tax credit, which recognized qualifying expenditures for fiscal years 1999
through 2007. The R&D tax credit recognized in fiscal 2008 was $234 thousand, which represents the
level of credit expected each fiscal year going forward under the current tax law.
Fiscal 2008 Sales Review
Sales in fiscal 2008 increased to most major markets throughout the world. Sales by geographic
region in fiscal 2008 were approximately 54% to the U.S., 15% to Asia, 12% to the Middle East, 9%
to South America and the remaining 10% to other international markets. In fiscal 2007, sales were
50% to the U.S., 17% to Asia, 23% to Middle East and the remaining 10% to other international
markets.
High demand for the Company’s product in the refining sector drove sales growth in fiscal 2008.
Approximately 43% of sales were for the refining market in fiscal 2008 compared with 35% in fiscal
2007. Sales to the chemical and petrochemical industry contributed 31% to total sales in fiscal
2008 compared with 39% in the prior fiscal year. Other sales, which include spare parts, were 24%
of total sales in fiscal 2008 compared with 21% in fiscal 2007. The power sector contributed 2% of
sales in fiscal 2008 compared with 5% in fiscal 2007.
The continued strength of the refining market resulted in an increase in sales of ejector systems,
which are critical components to the refining process. Ejector system sales were 42% of total
sales in fiscal 2008, up from 33% in fiscal 2007. Condenser sales were 25% of total sales in
fiscal 2008 compared with 29% in fiscal 2007. Spare parts sales contributed 18% of total sales in
fiscal 2008 compared with 17% in fiscal 2007, while heat exchanger and pump sales were 15% of sales
in fiscal 2008, down from 21% in fiscal 2007.
Balance Sheet and Cash Management
Cash, cash
equivalents and investments at March 31, 2008 were $36.8 million compared with $15.1 million as of March 31, 2007. Approximately $34.7 million is invested in United States
treasury notes with maturity periods of 91 to 120 days.
Net cash provided by operating activities was $3.7 million and $19.7 million in the fourth quarter
of fiscal 2008 and fiscal 2008, respectively, compared with net cash provided by operating
activities of
$1.7 million and $5.2 million in the fourth quarter of fiscal 2007 and fiscal 2007, respectively.
The
$14.5 million improvement in net cash provided by operating activities was due to higher net
income, greater utilization of deferred tax assets, and less operating working capital in fiscal
2008. Operating working capital was lower due to a reduction in the cash conversion cycle to 31
days as of March 31, 2008, down from 51 days as of March 31, 2007 and from lower accounts
receivable and inventory balances. The average operating working capital was 3% of sales in fiscal
2008 compared with 8% in fiscal 2007.
Mr. Ronald Hansen, Vice President Finance and Administration and CFO, noted, “We have made many
fundamental changes in how we do business to strengthen our ability to generate cash. We are
focused on reducing our cash conversion cycle time. In addition, we are realigning our people
processes to engage everyone in building a better Graham, growing our business, and maintaining
strong financial performance.”
Capital expenditures in the fourth quarter of fiscal 2008 were $0.4 million and $1.0 million for
fiscal 2008 compared with $0.5 million and $1.6 million in the fourth quarter of fiscal 2007 and
fiscal 2007, respectively. Approximately $600 thousand of the capital expenditures in fiscal 2008
were for plant machinery, with approximately 56% of the plant machinery expenditures used for
productivity improvements and 44% for maintenance. Fiscal 2009 capital expenditures for the fiscal
year ending March 31, 2009, are expected to be approximately $2.0 million with approximately 34%
for machinery, 53% for information technology and 13% for other expenditures. An estimated 68% of
the fiscal 2009 spending will be for productivity improvements and the remaining 32% for
maintenance.
Graham entered into a new revolving credit facility with the Bank of America, N.A., in December
2007. Such facility provides a line of credit of $30.0 million, including letters of credit and
bank guarantees.
- MORE -
Page 4
Graham Corporation Net Income Increases 23% on 9% Growth in Revenue for Fourth Quarter Fiscal 2008 May 30, 2008
Letters of credit outstanding as of March 31, 2008 were $11.3 million compared with $8.6 million as
of March 31, 2007. There were no borrowings outstanding as of March 31, 2008.
Outlook
Orders for fourth quarter of fiscal 2008 were at a record level of $35.1 million, a 29% increase
compared with orders of $27.3 million in the fourth quarter of fiscal 2007. For fiscal 2008,
orders were $107.1 million, up 24% compared with orders of $86.5 million of fiscal 2007. Fiscal 2008 orders
were driven by higher demand for condensers in the oil refining and petrochemical markets in the
Middle East, Canada and China. Orders from the refining sector were 48% of total orders in fiscal
2008 compared with 38% in fiscal 2007, while orders for the chemical and petrochemical sector were
26% and 35%, respectively.
Domestic orders were 63% in fiscal 2008 and international orders were 37% compared with 47% and
53%, respectively, in fiscal 2007. The increase in domestic orders was primarily a result of oil
refinery capacity expansions and revamps as well as a more selective internal order criteria
process. Although overall international order volume was down in fiscal 2008, orders from China,
South America and Canada were up year-over-year.
Due to the size of ejector and condenser orders, timing of order acceptance can significantly
impact any particular reporting period. Graham does not believe that quarter-to-quarter
comparisons are indicative of future business trends.
Backlog increased 40% to $75.7 million at March 31, 2008 compared with $54.2 million at March 31,
2007. Approximately 49% of the orders in the backlog are for oil refinery projects, 28% for
chemical and petrochemical projects and 23% for other industrial or commercial applications.
Approximately 11% of orders, or $8.3 million, of the backlog is not expected to be converted to
sales within the next twelve months.
Mr. Lines concluded, “Our goal is to more than double our revenue over the next few years through a
combination of organic growth and potential acquisitions, among other options. Driving our vision
is a simple theme of understanding and satisfying the current and future needs of existing and
potential customers. I am confident that through company-wide investment and continuous
improvement initiatives, we can reshape and redefine Graham to become the preferred supplier of our
products and services for our customers, a challenging and rewarding place to work for our
employees and a solid investment for our shareholders.”
The Company expects fiscal 2009 revenue to grow 15% to 20% year-over-year and anticipates gross
margin to be in the range of 37% to 40% for the year.
Webcast and Conference Call
Graham’s senior management team will host a conference call and live webcast today at 11:00 a.m.
EST. During the conference call and webcast, James R. Lines, President and CEO, and J. Ronald
Hansen, Vice President Finance and Administration and CFO, will review Graham’s financial and
operating results as well as its strategy and outlook. A question-and-answer session will follow.
Graham’s conference call and live webcast can be accessed as follows:
| |
• |
|
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. |
| |
| |
• |
|
The teleconference can be accessed by dialling 1-201-689-8560 and referencing
conference ID number 283989 approximately 5 — 10 minutes prior to the call. |
The conference call and webcast will be archived and can be reviewed as follows:
- MORE -
Page 5
Graham Corporation Net Income Increases 23% on 9% Growth in Revenue for Fourth Quarter Fiscal 2008 May 30, 2008
| |
• |
|
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 the
website for approximately 30 days. |
| |
| |
• |
|
A replay can be heard by calling 1-201-612-7415, and entering the account number
3055 and conference ID number 283989. The telephonic replay will be available
through June 4, 2008 at 11:59 p.m. Eastern Time. |
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. Over the past 72 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. More information regarding Graham
can be found at its website:
www.graham-mfg.com
Safe Harbor Statement
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 and changes in market conditions in the industries in which Graham Corporation operates
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 Annual and Quarterly Reports filed with the Securities and
Exchange Commission, including 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.
For more information contact:
J. Ronald Hansen, Vice President — Finance and Administration, and CFO
Phone: (585) 343-2216 Email: rhansen@graham-mfg.com
- -OR-
Deborah K. Pawlowski, Kei Advisors LLC
Phone: (716) 843-3908 Email: dpawlowski@keiadvisors.com
FINANCIAL TABLES FOLLOW.
- MORE -
Page 6
Graham Corporation Net Income Increased 23% on 9% Growth in Revenue for Fourth Quarter Fiscal 2008
May 30, 2008
Graham Corporation Fourth Quarter and Fiscal Year-End 2008
Consolidated Statements of Operations and Retained Earnings
(Amounts in thousands, except per share data)
(unaudited)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Year Ended |
|
| |
|
March 31, |
|
|
% |
|
|
March 31 |
|
|
% |
|
| |
|
2008 |
|
|
2007 |
|
|
Change |
|
|
2008 |
|
|
2007 |
|
|
Change |
|
Net sales |
|
$ |
22,756 |
|
|
$ |
20,811 |
|
|
|
9.3 |
% |
|
$ |
86,428 |
|
|
$ |
65,822 |
|
|
|
31.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold. |
|
|
13,817 |
|
|
|
14,724 |
|
|
|
(6.2 |
%) |
|
|
52,266 |
|
|
|
49,003 |
|
|
|
6.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
8,939 |
|
|
|
6,087 |
|
|
|
46.9 |
% |
|
|
34,162 |
|
|
|
16,819 |
|
|
|
103.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit margin |
|
|
39.3 |
% |
|
|
29.2 |
% |
|
|
34.6 |
% |
|
|
39.5 |
% |
|
|
25.6 |
% |
|
|
54.3 |
% |
Expenses and other income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
3,318 |
|
|
|
3,365 |
|
|
|
(1.4 |
%) |
|
|
13,074 |
|
|
|
10,806 |
|
|
|
21.0 |
% |
Operating profit |
|
|
5,621 |
|
|
|
2,722 |
|
|
|
106.5 |
% |
|
|
21,088 |
|
|
|
6,013 |
|
|
|
250.7 |
% |
Operating profit margin |
|
|
24.7 |
% |
|
|
13.1 |
% |
|
|
88.5 |
% |
|
|
24.4 |
% |
|
|
9.1 |
% |
|
|
168.1 |
% |
Interest income. |
|
|
(227 |
) |
|
|
(160 |
) |
|
|
41.9 |
% |
|
|
(1,026 |
) |
|
|
(516 |
) |
|
|
98.8 |
% |
Interest expense |
|
|
1 |
|
|
|
2 |
|
|
|
(50.0 |
%) |
|
|
10 |
|
|
|
10 |
|
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
5,847 |
|
|
|
2,880 |
|
|
|
103.0 |
% |
|
|
22,104 |
|
|
|
6,519 |
|
|
|
239.1 |
% |
Provision for income taxes. |
|
|
1,656 |
|
|
|
(536 |
) |
|
|
409.0 |
% |
|
|
7,070 |
|
|
|
758 |
|
|
|
832.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
4,191 |
|
|
$ |
3,416 |
|
|
|
22.7 |
% |
|
$ |
15,034 |
|
|
$ |
5,761 |
|
|
|
161.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
0.84 |
|
|
$ |
0.70 |
|
|
|
20.0 |
% |
|
$ |
3.03 |
|
|
$ |
1.18 |
|
|
|
156.8 |
% |
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
0.83 |
|
|
$ |
0.69 |
|
|
|
20.3 |
% |
|
$ |
2.98 |
|
|
$ |
1.17 |
|
|
|
154.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
5,017 |
|
|
|
4,897 |
|
|
|
|
|
|
|
4,956 |
|
|
|
4,867 |
|
|
|
|
|
Diluted |
|
|
5,078 |
|
|
|
4,936 |
|
|
|
|
|
|
|
5,042 |
|
|
|
4,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share |
|
$ |
0.03 |
|
|
$ |
0.02 |
|
|
|
|
|
|
$ |
0.10 |
|
|
$ |
0.08 |
|
|
|
|
|
- MORE -
Page 7
Graham Corporation Net Income Increased 23% on 9% Growth in Revenue for Fourth Quarter Fiscal 2008
May 30, 2008
Graham Corporation Fourth Quarter and Fiscal Year-End 2008
Consolidated Balance Sheets
(Amounts in thousands, except per share data)
(unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
March 31, |
|
| |
|
2008 |
|
|
2007 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,112 |
|
|
$ |
1,375 |
|
Investments |
|
|
34,681 |
|
|
|
13,676 |
|
Trade accounts receivable, net of allowances ($41 and $48 in
fiscal 2008 and fiscal 2007, respectively) |
|
|
5,052 |
|
|
|
11,859 |
|
Unbilled revenue |
|
|
8,763 |
|
|
|
4,793 |
|
Inventories |
|
|
4,797 |
|
|
|
4,682 |
|
Domestic and foreign income taxes receivable |
|
|
1,502 |
|
|
|
145 |
|
Prepaid expenses and other current assets |
|
|
463 |
|
|
|
209 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
57,370 |
|
|
|
36,739 |
|
Property, plant and equipment, net |
|
|
9,060 |
|
|
|
8,780 |
|
Deferred income tax asset |
|
|
70 |
|
|
|
2,901 |
|
Prepaid pension asset |
|
|
4,186 |
|
|
|
445 |
|
Other assets |
|
|
25 |
|
|
|
13 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
70,711 |
|
|
$ |
48,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of capital lease obligations |
|
$ |
20 |
|
|
$ |
37 |
|
Accounts payable |
|
|
5,461 |
|
|
|
5,143 |
|
Accrued compensation |
|
|
4,517 |
|
|
|
3,205 |
|
Accrued expenses and other liabilities |
|
|
2,114 |
|
|
|
2,048 |
|
Customer deposits |
|
|
5,985 |
|
|
|
6,100 |
|
Deferred income tax liability |
|
|
2,275 |
|
|
|
87 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
20,372 |
|
|
|
16,620 |
|
|
|
|
|
|
|
|
|
|
Capital lease obligations |
|
|
36 |
|
|
|
56 |
|
Accrued compensation |
|
|
232 |
|
|
|
263 |
|
Deferred income tax liability |
|
|
315 |
|
|
|
— |
|
Other long-term liabilities |
|
|
— |
|
|
|
58 |
|
Accrued pension liability |
|
|
271 |
|
|
|
251 |
|
Accrued postretirement benefits |
|
|
949 |
|
|
|
976 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
22,175 |
|
|
|
18,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $1 par value - |
|
|
|
|
|
|
|
|
Authorized, 500 shares |
|
|
|
|
|
|
|
|
Common stock, $.10 par value - |
|
|
|
|
|
|
|
|
Authorized, 6,000 shares |
|
|
|
|
|
|
|
|
Issued, 4,990 and 4,859 shares in 2008 and 2007, respectively |
|
|
499 |
|
|
|
389 |
|
Capital in excess of par value |
|
|
12,674 |
|
|
|
10,008 |
|
Retained earnings |
|
|
37,216 |
|
|
|
22,675 |
|
Accumulated other comprehensive loss |
|
|
(1,820 |
) |
|
|
(2,367 |
) |
Treasury stock (1 share in 2008) |
|
|
(22 |
) |
|
|
— |
|
Notes receivable from officers and directors |
|
|
(11 |
) |
|
|
(51 |
) |
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
48,536 |
|
|
|
30,654 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
70,711 |
|
|
$ |
48,878 |
|
|
|
|
|
|
|
|
- MORE -
Page 8
Graham Corporation Net Income Increased 23% on 9% Growth in Revenue for Fourth Quarter Fiscal 2008
May 30, 2008
Graham Corporation Fourth Quarter and Fiscal Year-End 2008
Condensed Consolidated Statements of Cash Flows
(Dollar amounts in thousands)
(unaudited)
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year Ended March 31, |
|
| |
|
2008 |
|
|
2007 |
|
|
2006 |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
15,034 |
|
|
$ |
5,761 |
|
|
$ |
3,586 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
989 |
|
|
|
887 |
|
|
|
793 |
|
Discount accretion on investments |
|
|
(904 |
) |
|
|
(458 |
) |
|
|
(265 |
) |
Stock-based compensation expense |
|
|
187 |
|
|
|
84 |
|
|
|
— |
|
(Gain) loss on disposal or sale of property, plant and equipment |
|
|
3 |
|
|
|
(17 |
) |
|
|
(6 |
) |
Deferred income taxes |
|
|
5,066 |
|
|
|
646 |
|
|
|
2,150 |
|
(Increase) decrease in operating assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
6,807 |
|
|
|
(5,882 |
) |
|
|
4,048 |
|
Unbilled revenue |
|
|
(3,969 |
) |
|
|
185 |
|
|
|
(1,358 |
) |
Inventories |
|
|
(115 |
) |
|
|
433 |
|
|
|
(45 |
) |
Domestic and foreign income taxes receivable |
|
|
(1,358 |
) |
|
|
(31 |
) |
|
|
(70 |
) |
Prepaid expenses and other current and non-current assets |
|
|
(250 |
) |
|
|
(7 |
) |
|
|
(104 |
) |
Prepaid pension asset |
|
|
(3,045 |
) |
|
|
(1,979 |
) |
|
|
(3,076 |
) |
Increase (decrease) in operating liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
159 |
|
|
|
1,007 |
|
|
|
761 |
|
Accrued compensation, accrued expenses and other current and
non-current liabilities |
|
|
1,308 |
|
|
|
237 |
|
|
|
825 |
|
Customer deposits |
|
|
(127 |
) |
|
|
4,547 |
|
|
|
258 |
|
Long-term portion of accrued compensation, accrued pension
liability and accrued postretirement benefits |
|
|
(83 |
) |
|
|
(220 |
) |
|
|
(964 |
) |
|
|
|
|
|
|
|
|
|
|
Total adjustments |
|
|
4,668 |
|
|
|
(568 |
) |
|
|
2,947 |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
19,702 |
|
|
|
5,193 |
|
|
|
6,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(1,027 |
) |
|
|
(1,637 |
) |
|
|
(1,048 |
) |
Proceeds from disposal of property, plant and equipment |
|
|
45 |
|
|
|
25 |
|
|
|
8 |
|
Purchase of investments |
|
|
(94,781 |
) |
|
|
(33,300 |
) |
|
|
(33,160 |
) |
Redemption of investments at maturity |
|
|
74,680 |
|
|
|
30,500 |
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
Net cash used by investing activities |
|
|
(21,083 |
) |
|
|
(4,412 |
) |
|
|
(9,200 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in short-term debt, net |
|
|
— |
|
|
|
— |
|
|
|
(1,872 |
) |
Principal repayments on long-term debt net of proceeds from |
|
|
(37 |
) |
|
|
(52 |
) |
|
|
(50 |
) |
issuance of long-term debt |
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock |
|
|
1,116 |
|
|
|
413 |
|
|
|
1,424 |
|
Dividends paid |
|
|
(493 |
) |
|
|
(387 |
) |
|
|
(452 |
) |
Sale of treasury stock |
|
|
— |
|
|
|
— |
|
|
|
3,403 |
|
Excess tax deduction on stock awards |
|
|
1,473 |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
(17 |
) |
|
|
42 |
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
2,042 |
|
|
|
16 |
|
|
|
2,514 |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
76 |
|
|
|
8 |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
737 |
|
|
|
805 |
|
|
|
(154 |
) |
Cash and cash equivalents at beginning of year |
|
|
1,375 |
|
|
|
570 |
|
|
|
724 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year |
|
$ |
2,112 |
|
|
$ |
1,375 |
|
|
$ |
570 |
|
|
|
|
|
|
|
|
|
|
|
- MORE -
Page 9
Graham Corporation Net Income Increased 23% on 9% Growth in Revenue for Fourth Quarter Fiscal 2008
May 30, 2008
Graham Corporation Fourth Quarter and Fiscal Year-End 2008
Additional Information
ORDER AND BACKLOG TREND
($, in millions)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
|
|
Q107 |
|
|
|
Q207 |
|
|
|
Q307 |
|
|
|
Q407 |
|
|
|
FY 2007 |
|
|
|
Q108 |
|
|
|
Q208 |
|
|
|
Q308 |
|
|
|
Q408 |
|
|
|
FY 2008 |
|
|
| |
|
|
|
6/30/06 |
|
|
|
9/30/06 |
|
|
|
12/31/06 |
|
|
|
3/31/07 |
|
|
|
3/31/07 |
|
|
|
6/30/07 |
|
|
|
9/30/07 |
|
|
|
12/31/07 |
|
|
|
3/31/08 |
|
|
|
3/31/08 |
|
|
| |
Orders |
|
|
$ |
20.0 |
|
|
|
$ |
22.1 |
|
|
|
$ |
17.1 |
|
|
|
$ |
27.3 |
|
|
|
$ |
86.5 |
|
|
|
$ |
24.9 |
|
|
|
$ |
20.5 |
|
|
|
$ |
26.6 |
|
|
|
$ |
35.1 |
|
|
|
$ |
107.1 |
|
|
| |
Backlog |
|
|
$ |
38.6 |
|
|
|
$ |
45.0 |
|
|
|
$ |
47.6 |
|
|
|
$ |
54.2 |
|
|
|
$ |
54.2 |
|
|
|
$ |
59.2 |
|
|
|
$ |
56.8 |
|
|
|
$ |
63.0 |
|
|
|
$ |
75.7 |
|
|
|
$ |
75.7 |
|
|
| |
SALES BY INDUSTRY
($, in millions)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
|
|
Q107 |
|
|
|
Q207 |
|
|
|
Q307 |
|
|
|
Q407 |
|
|
|
FY 2007 |
|
|
|
Q108 |
|
|
|
Q208 |
|
|
|
Q308 |
|
|
|
Q408 |
|
|
|
FY 2008 |
|
|
| |
|
|
|
6/30/06 |
|
|
|
9/30/06 |
|
|
|
12/31/06 |
|
|
|
3/31/07 |
|
|
|
3/31/07 |
|
|
|
6/30/07 |
|
|
|
9/30/07 |
|
|
|
12/31/07 |
|
|
|
3/31/08 |
|
|
|
3/31/08 |
|
|
| |
Refining |
|
|
$ |
4.0 |
|
|
|
$ |
5.3 |
|
|
|
$ |
6.0 |
|
|
|
$ |
7.4 |
|
|
|
$ |
22.7 |
|
|
|
$ |
9.7 |
|
|
|
$ |
12.0 |
|
|
|
$ |
7.8 |
|
|
|
$ |
7.5 |
|
|
|
$ |
37.0 |
|
|
| |
Chemical/
Petrochemical |
|
|
$ |
7.2 |
|
|
|
$ |
6.6 |
|
|
|
$ |
4.2 |
|
|
|
$ |
7.8 |
|
|
|
$ |
25.8 |
|
|
|
$ |
4.6 |
|
|
|
$ |
6.5 |
|
|
|
$ |
8.5 |
|
|
|
$ |
7.3 |
|
|
|
$ |
26.9 |
|
|
| |
Power |
|
|
$ |
0.7 |
|
|
|
$ |
1.0 |
|
|
|
$ |
1.2 |
|
|
|
$ |
0.4 |
|
|
|
$ |
3.3 |
|
|
|
$ |
0.8 |
|
|
|
$ |
0.4 |
|
|
|
$ |
0.1 |
|
|
|
$ |
0.1 |
|
|
|
$ |
1.4 |
|
|
| |
Other |
|
|
$ |
2.7 |
|
|
|
$ |
3.0 |
|
|
|
$ |
3.1 |
|
|
|
$ |
5.2 |
|
|
|
$ |
14.0 |
|
|
|
$ |
4.9 |
|
|
|
$ |
4.2 |
|
|
|
$ |
4.1 |
|
|
|
$ |
7.9 |
|
|
|
$ |
21.1 |
|
|
| |
Total |
|
|
$ |
14.6 |
|
|
|
$ |
15.9 |
|
|
|
$ |
14.5 |
|
|
|
$ |
20.8 |
|
|
|
$ |
65.8 |
|
|
|
$ |
20.0 |
|
|
|
$ |
23.1 |
|
|
|
$ |
20.5 |
|
|
|
$ |
22.8 |
|
|
|
$ |
86.4 |
|
|
| |
SALES BY REGION
($, in millions)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
|
|
Q107 |
|
|
|
Q207 |
|
|
|
Q307 |
|
|
|
Q407 |
|
|
|
FY 2007 |
|
|
|
Q108 |
|
|
|
Q208 |
|
|
|
Q308 |
|
|
|
Q408 |
|
|
|
FY 2008 |
|
|
| |
|
|
|
6/30/06 |
|
|
|
9/30/06 |
|
|
|
12/31/06 |
|
|
|
3/31/07 |
|
|
|
3/31/07 |
|
|
|
6/30/07 |
|
|
|
9/30/07 |
|
|
|
12/31/07 |
|
|
|
3/31/08 |
|
|
|
3/31/08 |
|
|
| |
North America |
|
|
$ |
7.6 |
|
|
|
$ |
6.8 |
|
|
|
$ |
9.1 |
|
|
|
$ |
12.2 |
|
|
|
$ |
35.8 |
|
|
|
$ |
11.7 |
|
|
|
$ |
17.8 |
|
|
|
$ |
11.2 |
|
|
|
$ |
12.0 |
|
|
|
$ |
52.7 |
|
|
| |
Middle East |
|
|
$ |
4.8 |
|
|
|
$ |
4.5 |
|
|
|
$ |
1.8 |
|
|
|
$ |
4.1 |
|
|
|
$ |
15.3 |
|
|
|
$ |
4.2 |
|
|
|
$ |
0.5 |
|
|
|
$ |
1.6 |
|
|
|
$ |
3.7 |
|
|
|
$ |
10.0 |
|
|
| |
Asia |
|
|
$ |
1.1 |
|
|
|
$ |
3.9 |
|
|
|
$ |
2.2 |
|
|
|
$ |
4.0 |
|
|
|
$ |
11.2 |
|
|
|
$ |
2.5 |
|
|
|
$ |
2.1 |
|
|
|
$ |
3.9 |
|
|
|
$ |
4.3 |
|
|
|
$ |
12.8 |
|
|
| |
Other |
|
|
$ |
1.1 |
|
|
|
$ |
0.7 |
|
|
|
$ |
1.4 |
|
|
|
$ |
0.5 |
|
|
|
$ |
3.5 |
|
|
|
$ |
1.6 |
|
|
|
$ |
2.7 |
|
|
|
$ |
3.8 |
|
|
|
$ |
2.8 |
|
|
|
$ |
10.9 |
|
|
| |
Total |
|
|
$ |
14.6 |
|
|
|
$ |
15.9 |
|
|
|
$ |
14.5 |
|
|
|
$ |
20.8 |
|
|
|
$ |
65.8 |
|
|
|
$ |
20.0 |
|
|
|
$ |
23.1 |
|
|
|
$ |
20.5 |
|
|
|
$ |
22.8 |
|
|
|
$ |
86.4 |
|
|
| |
###
