Graham Corporation

Greetings. Welcome to the Graham Corporation's second quarter 2024 financial results. At this time, all participants are on a listen-only mode. A question and answer session will follow the phone presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Deborah Pawlowski, Investor Relations for Graham Corporation. You may begin.

Thank you, Shamali, 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 second quarter fiscal 2024 financial results that were released earlier this morning. If not, you can find that release, along with slides and supplemental sales orders and backlog information, on our website at ir.gramcorp.com. We will reference the slides during our presentation today. Dan and Chris are going to provide their formal remarks, after which we will open the line for questions. So, if you will turn to slide two, 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 to 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 FCC.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. So as a result, quantitative reconciliation of each of these is not required or provided. But you can find the disclaimer regarding our use of performance metrics at the back of our deck in the supplemental slide. 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 continue to make solid progress winning more business, improving processes, and executing better. During the quarter, we shipped the last of the first article units related to the Naval Nuclear Propulsion Program for both the Columbia-class submarine and the Ford-class carrier. We learned a lot building these units and expect to carry those learnings forward as we work on the next units for these programs. I'll remind you that we do want more first article work. That is the first step in getting more content on the ships. Any new content wins, though, will not be of the magnitude our first efforts were, so our learning curve will not be as painful to margins. Our new credit agreement provides us with greater financial flexibility through greater borrowing capacity to fund our growth. Chris will talk more about this later. And speaking of growth, we had a record level of monthly orders in October at approximately $110 million. A large part of the total included follow-on orders to supply more heat exchangers for a strategic Navy program. As we continue to steadily progress towards our fiscal 2027 goals, we are also identifying new opportunities for growth and margin expansion. There's lots of exciting things happening at Graham. Slide four highlights our strengthening financial results that reflect the effectiveness of our strategy. Revenue grew 18% year over year to $45 million, while gross margin expanded 220 basis points. Our improvements are translating to the bottom line. We had net income of $411,000 and earnings per diluted share of 4 cents. Adjusted EBITDA was $2.7 million and 6% of sales. Our book to bill for the quarter is somewhat misleading. Given the size of our defense orders and the timing of their release causes a lumpy flow for our business. As I noted earlier, October orders more than made up for what we received in orders during the second quarter. With that, let me turn it over to Chris for the financial details. Chris?