Graham Corporation

Good day and welcome to Graham Corporation first quarter 2026 financial results conference call. All participants will be in the listen only mode. Should you need assistance, please signal a conference specialist by pressing the star keys followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your questions, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Tom Cook, Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to Graham's Fiscal First Quarter 2026 earnings call. With me on the call today are Matt Moore, President and Chief Executive Officer, and Chris Stone, Chief Financial Officer. This morning, we released our financial results. Our earnings release and accompanying presentations in today's call are available on our website at ir.gramcorp.com. You should be aware that we may make 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 that are filed by the company with the Securities and Exchange Commission. You can find these documents on our website or at sec.gov. During today's call, we will also discuss 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 ROIC, orders, backlog, and book-to-bill ratio. These are operational measures, and a quantitative reconciliation of each is not required or provided. You can find a disclaimer regarding our use of KPIs at the back of today's presentation. So with that, if you'll please advance to slide three, I'll turn it over to Matt to begin. Matt?

Thank you, Tom. Good morning, and welcome, everyone, to our first quarter fiscal year 2026 earnings call. I'm pleased with our strong results to start the fiscal 2026. demonstrating the strength of our diversified product portfolio and strategic positioning. Revenue increased 11% to $55.5 million, reflecting continued performance across our key markets. This growth was driven by increased sales in our energy and process markets, particularly by refining, petrochemical and new energy, along with strong aftermarket performance that was 33% higher than the prior year. Adjusted EBITDA increased 33% year-over-year to $6.8 million, or a 12.3% increase or percentage of sales. These results reflect our continued focus on operational excellence and exceptional commitment by our team. We also achieved a strong book-to-bill ratio of 2.3 times, driven by our driving our backlog to a company record of $482.9 million, a 22% increase over the prior year. This robust backlog provides excellent visibility into our business, with approximately 35% to 40% expected to convert to revenue over the next 12 months. On the defense side, we continue to see strong momentum with our U.S. Navy programs. We recently announced a $25.5 million follow-on order to produce mission-critical hardware for the MK-48 Mod 7 heavyweight torpedo program in July. This is in addition to the $136.5 million follow-on contract we were awarded to support the U.S. Navy's Virginia-class submarine program. These awards reaffirm our position as a trusted supplier to the U.S. Navy and provide stable, reoccurring revenue streams as well as strong visibility into our future revenue. I'm also pleased to remind you of our continued success in securing strategic partnerships and funding. In May, we announced a $2.2 million strategic investment from a key defense customer to advance our critical weld evaluation capabilities for the Columbia and Virginia-class submarine programs. Combined with Graham's $1.4 million contribution, this represents a total $3.6 million project investment. This latest funding adds to our strong track record of partner investments, which includes a substantial $13.5 million investment supporting our capacity expansion efforts and a $2.1 million Blue Forge Alliance grant that enabled us to expand both our welder training programs and equipment capabilities. These strategic partnerships demonstrate the confidence our customers and partners have in our technology and market position. Moving to energy and process, we saw a favorable mix in the quarter across our diversified product portfolio, with aftermarket sales remaining robust and increased activity in our new energy side of the business. We are seeing a lot of momentum and opportunities in the small modular nuclear reactors and cryogenics. where we are seeing increased interest in our mission-critical technologies. We're also advancing innovations like our next-gen nozzle for vacuum distillation towers that we mentioned in previous quarters. Overall, the underlying demand remains strong, though timing has become more uncertain on the larger global capital projects. In our space segment, we continue to see excellent traction. The launch market is gaining momentum and our specialized applications are performing exceptionally well, demonstrating the strong underlying demand in this sector. We are currently executing several low-rate production programs that have long-term scale opportunity. Our full product lifecycle approach, including design, manufacturing, and test, is proving effective, with our space pipeline strong as ever. We remain optimistic our growth prospects in this dynamic environment. Turning to our operational initiatives on slide four, I'm pleased to report that the strategic capital investments remain on schedule and budget. We received our certificate of occupancy in July for the 30,000 square foot Batavia manufacturing facility to support the US Navy. Also, we expect this to be fully operational by the end of calendar year Q3. This facility featured enhances capabilities through automated welding, optimized product flow, and advanced machining to accelerate throughput to meet the rising demand that we're seeing on the several Navy platforms. To that point, we have completed the installation of our six automated welding machines and calibration is complete. Our new cryogenic propellant testing facility in Florida is also progressing well, with the liquid oxygen tank now being installed and the facility expected to be operational this quarter and begin to generate return this fiscal year. Moving to our internal operations, our ERP system implementation in Batavia continues to progress, which we expect to come online by the end of calendar year 2025. This system will reap immediate benefits for Graham by streamlining workflows, improving transactional efficiency, and standardizing cross-functional communications. These investments are targeting returns on investment exceeding 20%, and many of these cross-functional and scalable initiatives, from automated welding and expanded R&D to workforce training, will position us for future growth across all our markets. Moving to M&A, we continue to see a strong pipeline of acquisition opportunities that align with our strategic initiatives and remain focused on pursuing opportunities that offer risk-adjusted returns and can help us accelerate our product lifecycle strategy. Our M&A growth criteria is laid out on slide 14 from our earnings deck, where we expect opportunistic acquisitions to supplement organic growth of 8% to 10%. In closing, our first fiscal quarter demonstrates strong results, continued business momentum across our diversified portfolio. With our record backlog, strategic investments coming online, and strong market positioning, we're well positioned to capitalize on the opportunities that lie ahead. The foundation we've built over the past several years is enabling us to deliver consistent results while positioning Graham to achieve sustainable long-term growth and our fiscal 2027 targets of 8 to 10% organic revenue growth per year. And low to mid-teen adjusted EBITDA margins as we transition from our improved phase to our growth phase. I am incredibly proud of the team we've built and our intense focus on winning together to deliver unparalleled solutions for our customers in new and exciting ways. We are just getting started. With that, I'll turn it over to Chris. to review the financial results.