Graham Corporation

Greetings, and welcome to the Graham Corporation Third Quarter Fiscal Year 2026 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, Tom Cook, Investor Relations. Thank you, sir. You may begin.

Thank you, and good morning, everyone. Welcome to Graham's Fiscal Third Quarter 2026 Earnings Call. With me on the call today are Matt Malone, President and CEO, and Chris Dome, Chief Financial Officer. This morning, we released our financial results. Our earnings release and accompanying presentation to 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 the call over to Matt to begin. Matt?

Thank you, Tom, and good morning, everyone. We appreciate you joining us to review our third quarter fiscal 2026 results. We delivered another strong quarter, continuing to execute our strategy and demonstrate the resiliency and diversification of our business. Revenue increased 21% to $56.7 million, driven by solid performance across our end markets. Results were supported by the timing of key project milestones, particularly within our defense business, along with contributions from our new programs and continued growth across existing platforms. Adjusted EBITDA increased 50% to $6 million, with adjusted EBITDA margin of 10.7%. The year-over-year improvement in profitability reflects disciplined execution, ongoing productivity initiatives, and the scalability of our operating model as volumes continue to grow. Bookings remained strong during the quarter, resulting in a book-to-bill ratio of 1.3 times and driving backlog to a record $515.6 million, up 34% year-over-year. Our backlog continues to provide excellent visibility, with approximately 35% to 40% expected to convert to revenue over the next 12 months. Finally, during the quarter, we completed the technology purchase of Exdot Bearing Technologies, an engineering-led firm with patented foil-bearing technology and deep expertise in high-speed rotating machinery. This acquisition strengthens our competitive position in an area where performance, reliability, and efficiency are becoming increasingly critical across aerospace, defense, energy transition, and industrial applications. X-DOT proprietary foil-bearing designs deliver superior performance while reducing development and production costs. And when combined with Barber-Nichols' turbo machinery capabilities, significantly expand our ability to engineer and deliver advanced high-speed pumps, compressors, and rotating machines. The integration of X-DOT into Barber-Nichols is going very well, and we are already leveraging their technology to win future opportunities. Turning now to our recent acquisition of FlacTech on slide four. In late January, we completed the acquisition of FlacTech, a pioneer in advanced mixing and materials processing solutions for a purchase price of $35 million, comprised of 85% cash and 15% equity. Additionally, there is an opportunity for additional performance-based earn out of up to $25 million over the next four years. The transaction was structured to align incentives, generate attractive returns, and preserve balance sheet flexibility, while bringing into Graham a highly differentiated and scalable engineered products business. Black Tech adds advanced materials and processing as a third core technology platform for Graham, alongside our existing strengths in vacuum, heat transfer, and high-speed turbo machinery. The company is a recognized leader in high-performance, bladeless centrifugal mixing, serving mission-critical applications across defense, space, energy, and process in a broad range of advanced industrial markets. With approximately $30 million of annual revenue and more than 2,500 units installed globally and a deep portfolio of proprietary intellectual property, FlacTech brings both scale and durability to our portfolio. Additionally, FlacTech will bring our overall revenue mix closer to our long-term goal of 50% defense and 50% commercial, as approximately 60% of their sales are into the energy and process market, 15% to defense, and 10% to the space market. A key element of FlacTech's value proposition is its large and growing install base. which drives predictable, reoccurring demand for consumables, accessories, and services. This creates enhanced revenue visibility, strong customer retention, and attractive lifetime value economics, while complementing Graham's existing engineered-to-order and project-based businesses. Within the FLAC Tech portfolio, the mega product line stands out as a category-defining platform, with the potential to meaningfully expand Graham's addressable markets. Mega is the world's only production scale bladeless dual asymmetric centrifugal mixer capable of processing multi-hundred kilogram batches in a 55-gallon drum format. It delivers a step change in manufacturing throughput, enabling customers to reduce mixing cycles from hours to minutes while maintaining exceptional precision, repeatability, and quality consistency at scale. The mega platform has been production-validated, mission-critical, safety-sensitive applications and offers compelling customer economics through faster cycle times, smaller footprints, improved capacity utilization, and lower unit costs. Demand for this large-scale mixing platform is strong, with multiple use cases across the value chain and significant expansion opportunities within FlacTech's existing customer base. Strategically, this acquisition significantly enhances Graham's ability to solve increasingly complex customer challenges that require integrated solutions across multiple disciplines. Black Tech's technology fits naturally alongside Barbara Nichols' turbo machinery and Graham Manufacturing's vacuum and heat transfer systems, allowing us a more comprehensive, differentiated engineering solutions platform. Together, these capabilities span the full value chain, from formulation and upstream processing through downstream production and quality control, where precision, repeatability, and performance are critical. Most importantly, FLAC Tech aligns with our defined M&A criteria that we have outlined for a few years now. That is a moted engineered product portfolio, process-critical applications, a predominantly domestic customer base, strong leadership continuity, and clear opportunities for long-term organic growth and margin expansion. We believe this acquisition meaningfully strengths Graham's competitive positioning, enhances the durability and visibility of our revenue base, and supports sustained value creation for shareholders long-term. We are really excited to have the entire FLACTECH team as part of Graham. Turning to organic investments on slide eight. We continue to make disciplined, high-return investments across the business that are now translating into tangible operating capabilities for future growth. Importantly, many of the strategic expansion projects we have discussed over the past several quarters are now completed or entering the final stages of commissioning. Positioning as well as demand across our end markets remains strong. Starting with defense, We completed our new Navy manufacturing facility in Batavia, New York during the second quarter of fiscal 2026. This $17.6 million expansion, supported by a $13.5 million customer grant, significantly expands our capacity and capabilities to support critical U.S. Navy programs. The facility is purpose-built for efficiency, precision, and scale, and incorporates automated welding, optimize product flow, and advance manufacturing processes. In addition, our automated welding machines are now fully installed and commissioned, and our new X-ray inspection facility in Batavia remains on track for completion later this fiscal year. Together, these investments materially enhance throughput, improve quality, and strengthen our ability to execute against long-cycle Navy programs with increasing production requirements. In energy and process, we completed the renovation of our assembly and test facility in Arvada, Colorado, earlier this fiscal year. That site is now fully operational with both product and personnel in place, providing increased flexibility and improved execution for capital projects and aftermarket work. During the quarter, we also kicked off an aftermarket acceleration initiative, leveraging AI tools to improve responsiveness, pricing, and service penetration. In parallel, we expanded and consolidated our engineering and service footprint in India, strengthening our global operating model and improving cost efficiency and scalability over time. From a market perspective, we are seeing some slowing as it relates to large capex purchases driven by lower oil prices, tariffs, and uncertain macro environment. Lastly, in space, we reached several important milestones. Our liquid nitrogen testing capability in Arvada was completed in the second quarter, with the first unit successfully tested and delivered to our end customer. More recently, during the fourth quarter, we completed construction of our new cryogenic test facility in Jupiter, Florida. That facility is now entering commissioning, which will continue through the end of this fiscal year. These investments meaningfully expand our in-house testing capability and capacity, enabling us to support customers as programs transition from development into higher-rate production. As we step back, the common thread across everything we've discussed this morning is discipline execution. We are delivering strong operating results today, while at the same time making deliberate organic and inorganic investments that expand our capabilities, deepen customer relationships, and position Graham for long-term growth. Our record backlog, meaning provides meaningful visibility, our balance sheet remains strong and flexible, and our investments are aligned where our customers' needs are headed. The acquisition of Black Tech meaningfully strengthens our technology platform and expands our ability to serve mission-critical applications across multiple end markets. While our organic investments are now coming online and enhance our throughput, quality, and scalability across the entire business. Together, these initiatives reinforce our confidence in Graham's ability to grow organically, expand margins over time, and continue to increase shareholder value. In short, we continue to do what we said we were going to do, steady progress while getting better every day through continuous improvement. With that, I'll turn the call over to Chris for a detailed review of our financial results.