Graham Corporation

Greetings. Welcome to the Graham Corporation third quarter fiscal year 2024 financial results call. At this time, all participants are in a listen-only mode. The 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. Please note this conference is being recorded. I will now turn the conference over to Deborah Pulaski, Investor Relations for Graham Corporation. Thank you. You may begin.

Thank you, Daryl, and good morning, everyone. We certainly appreciate your time today and your interest in Graham Corporation. Here with me on the call are Dan Soren, our president and CEO, and Chris Thome, our chief financial officer. Dan and Chris are going to provide their formal remarks, after which we will open the line for questions. You should have a copy of the third quarter fiscal 2024 financial results that were released this morning. And if not, you can access the release on our website at ir.gramcorp.com. You'll also find there the slides that will accompany today's discussion. If you will turn to slide two on that deck, 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 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 reconciliations 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 ratios. 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, 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 will turn it over to Dan to begin. Dan?

Thanks, Debbie, and good morning, everyone. Reflecting on the past few years, we firmly believe that our business is now in a significantly improved position due to the strategic actions that we've taken. This has been a great team effort, and I would like to thank our customers, our employees, and our service providers for their contribution to our turnaround. In the third quarter, our performance demonstrated robust strength underscoring the consistent execution of our strategic approach aimed at cultivating high-quality, top-line growth along with margin-accretive initiatives to enhance our future earnings potential. Notable highlights from the quarter include gross and adjusted EBITDA margin expansion, a substantial increase in bookings that led to a record backlog of nearly $400 million, And we refinanced our debt with a lower cost and more flexible credit facility, further solidifying our financial framework. Our bottom line was muted, however, given some atypical expenses that Chris will talk to. But on an adjusted basis, net income was up over 180% to $2.4 million. We generated strong cash from operations during the quarter, given recent working capital initiatives along with stronger financial discipline. This enabled significant debt pay down during the quarter and strategic investments, both organic and inorganic. We highlight on slide four a significant investment made during the quarter, which was the acquisition of P3 Technologies. This was a great bolt-on business. which brings highly complimentary technology that enhances and expands our turbo machinery solutions engineering and development team. Their patented technologies deepen our reach into existing space and new energy markets and create greater diversification with the addition of medical markets. From a financial perspective, P3 brings about $6 million of annual revenue accretive gross and adjusted EBITDA margins, and approximately $6 million of backlog. They also have what we feel is a lot of high-growth pipeline opportunities that are highly complementary to our Barbara Nichols Turbo Machinery business. In fact, in the short period that they have been with us, that business has already proven instrumental in in fortifying some of our solution offerings and has amplified our financial profile, including being accretive to earnings in the third quarter. It is important to note that given this quarter's robust cash generation, we were able to repay nearly all of the debt associated with the acquisition during the third quarter. Together, we believe we have a bright future as we aim to create opportunities for product and technology integration to provide more effective solutions across multiple markets. As we look forward, we are focused on advancing Graham by building a collaborative culture across our brands, leveraging best practices, and advancing employee development to reinforce our core capabilities of precision machining, of critical turbo machinery components and specialty welding for fabrication of critical equipment for large heat transfer and vacuum applications. Our confidence remains high in our ability to consistently execute our strategy and leverage the multitude of opportunities before us. With that, let me turn it over to Chris for the financial details. Chris?