Graham Corporation

Greetings and welcome to the Graham Corporation's second quarter fiscal year 2025 financial results conference call. At this time, all participants are in listen-only mode. The question and answer session will follow today's formal presentation. If anyone on the call should require operator assistance, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Deborah Pulaski, Investor Relations for Graham Corporation. Thank you. You may now begin.

Thank you, Rob, and good morning, everyone. We certainly appreciate your time today and your interest in Graham. Here with me on the call are Dan Thorin, our President and CEO, Chris Stone, our Chief Financial Officer, and Matt Malone, Vice President of Graham Corporation and General Manager of Barbara Nichols. Dan, Chris, and Matt are going to provide their formal remarks, after which we will open the line for questions. You should have a copy of the second quarter fiscal year 2025 financial results that were released this morning. If you don't have the release, it is on our website at ir.gramcorp.com. You will also find there the slides that will accompany today's discussion. So in looking at those slides, if you would 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 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 table 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 a book-to-bill ratio. These are operational measures, and a quantitative reconciliation of each of this is not required or provided. You can find the disclaimer regarding our use of KPIs at the back of our slide deck. So with that, if you would please advance to slide three, I'll turn it over to Dan to begin. Dan?

Thank you, Deb. Good morning, everyone. Our team delivered record revenue of $53.6 million, marking a 19% increase that highlights robust demand across our markets. This quarter showcases the effectiveness of our efforts to expand our market reach, improve operations, and strengthen our business model over the last few years. Notably, our results reflect significant margin expansion Our gross margin improved by 790 basis points, reaching nearly 24% of sales, and our adjusted EBITDA margin expanded by 550 basis points to 10.5% of sales. This margin expansion translated into meaningful bottom line growth, reinforcing our focus on higher margin opportunities and solid execution throughout the business. We are positioning Graham as a resilient and increasingly profitable leader in our key markets. In addition, we are operating from a position of financial strength with no debt, more than $32 million in cash on hand, and access to an additional $43 million through our revolving credit facility. This strong balance sheet enables us to confidently pursue growth initiatives that meet our hurdle rates while maintaining agility. In line with our growth strategy, we recently launched our next-gen steam ejector nozzle at a Gulf Coast refinery, marking a significant milestone for the company. This new technology is designed to deliver efficiency improvements, environmental benefits, and enhance profitability for our customers, demonstrating the success of our R&D investments. Based on our estimates of the current installed base that can benefit from this advanced product, we see meaningful potential for our next-gen nozzle technology, with an estimated total market opportunity exceeding $50 million over the next 5 to 10 years. Additionally, we made a land purchase in Arvada, Colorado to support the anticipated growth of our Barbara Nichols subsidiary. We also announced yesterday our plans to establish a new cryogenic propellant testing facility, further leveraging Graham's expertise in the cryogenic and space launch industries. I will leave it to Matt to provide more details on these two exciting initiatives. Chris will review our financials further, but I'm pleased to share that we raised our full-year guidance for both gross margin and adjusted EBITDA, which puts us solidly on track to achieve our long-term goal of low to mid-teen EBITDA margins by fiscal 2027. With a record $407 million in backlog and a strong book-to-bill ratio of 1.2 times, we are confident that our momentum will continue supporting sustained growth and profitability in the years ahead. Lastly, with recent headlines highlighting challenges in Navy ship and submarine production, we recognize that supply chain issues are creating concerns about potential schedule delays and future order rates. However, in the short term, this is not expected to impact our business as our customers are urging us to maintain and even accelerate schedules. In fact, this environment presents an opportunity for us to capture additional work where other suppliers may be struggling to meet demands. Now, I will turn it over to Matt, who will provide more insight into our recent growth initiatives. Matt?