Graham Corporation

Greetings, and welcome to the Graham Corporation first quarter fiscal year 2024 financial results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Debbie Pawlowski, Investor Relations for Graham Corporation. Thank you. You may begin.

Thank you, Christine, and good morning, everyone. We certainly appreciate your time today and your interest in Graham Corporation. Here with me on the call are Dan Thorne, our President and CEO, and Chris Thome, our Chief Financial Officer. You should have a copy of the first quarter fiscal 2024 financial results as well as the strategic investment release that we put out this morning over the wires. If you don't, you can access both releases and our slides on our website at ir.gramcorp.com. The slides on the website will accompany our conversation today. Dan and Chris are going to provide their formal remarks, after which we will open the line for questions. But if you will turn to slide 2, I will review the Safe Harbor Statement. You should be aware that we may make some forward-looking statements during the formal discussion as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results that differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed by the company with Securities and Exchange Commission. You can find those documents on our website or at sec.gov. During today's call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliation of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides. We also use key performance indicators to help gauge the progress and performance of the company. These key performance metrics are orders, backlog, and book to bill. They are operational measures, and the company's methodology for calculating these numbers does not meet the definition of a non-GAAP measure, as that term is defined by the SEC, but so as a result, a quantitative reconciliation of each of these is not required or provided. But you can find the disclaimer regarding our use of key performance metrics at the back of our deck in the supplemental slides. So with that, if you would please advance to slide three, I'll turn it over to Dan to begin. Dan?

Thanks, Debbie, and good morning, everyone. We reported better than expected results for our first quarter of fiscal 24, giving us a strong start to the year. Revenue grew 32% to a quarterly record of $47.6 million. Gross margin expanded to 23% and earnings per diluted share increased over four times to 25 cents. We had a few benefits to the quarter that were working in our favor. we had very favorable mix as a result of better priced projects and project timing. We also are seeing the impacts of improving execution, the expanded capacity we have created through productivity and increased direct labor, and better pricing in our backlog. Aside from our strong results, we also announced a major strategic investment by a defense customer to expand our capabilities in our Batavia operations in support of the Naval Nuclear Propulsion Program. The investment will be used to ensure we can support the U.S. Navy's shipbuilding plan. Chris will talk more about the investment and how we expect to recognize it through revenue over many years. We believe this investment validates the tough decisions we had to make in fiscal 2022. That year, we chose to make significant investments in order to deliver quality product in a timely manner to our customer. Back then, those decisions had a major negative impact on our earnings. As I noted in the release, there is a lot to be excited about here at Graham. We have made measurable progress and we are seeing it in our results. But what is not as visible to the outside is the advancements we are making as an organization. We have quite a bit of ground yet to cover, but I'm very encouraged by the development of a culture of openness, challenge, and growth that I am seeing in the team. We are in the third or maybe fourth evolution of Graham since its inception in 1936, and IPO in 1968. Our history is important and a demonstration of the sustainability and resilience of the business, but our future is what drives us. And while we still have much work to do, I am proud of what our team has accomplished and their openness to change and advancement. With that, let me turn it over to Chris for the financial details.