Graham(GHM) - 2026 Q3 - Quarterly Results

Financial Performance - Revenue increased 21% to $56.7 million compared to $47.0 million in the prior year[5]. - Gross profit rose 15% to $13.5 million, with a gross profit margin of 23.8%, down 100 basis points from the previous year[5][9]. - Net income per diluted share increased 79% to $0.25, while adjusted net income per diluted share rose 72% to $0.31[5][7]. - Net income for the quarter was $2.8 million, a significant 79% increase from $1.6 million in the same quarter last year, with diluted earnings per share rising to $0.25[37]. - Net income for the nine months ended December 31, 2025, increased to $10,530,000 from $7,835,000 in 2024, representing a growth of 34.4%[41]. - The net income margin improved to 5.9% for the nine months ended December 31, 2025, compared to 5.2% in 2024[43]. - Adjusted net income for the nine months ended December 31, 2025, was $11,881,000, an increase of 32.5% from $8,965,000 in 2024[45]. Sales and Orders - Orders totaled $71.7 million with a book-to-bill ratio of 1.3x, contributing to a record backlog of $515.6 million, a 34% increase year-over-year[5][16]. - Net sales for the third quarter of fiscal 2026 reached $56.7 million, a 21% increase compared to $47.0 million in the same quarter of the previous year[37]. - Net sales for the nine months ended December 31, 2025, reached $178,215,000, a 18.4% increase compared to $150,551,000 in 2024[43]. Operating Performance - Adjusted EBITDA increased 50% to $6.0 million, with an adjusted EBITDA margin of 10.7%[5][7]. - Operating income increased by 41% to $3.1 million, up from $2.2 million in the prior year, resulting in an operating margin of 5.5%[37]. - Adjusted EBITDA for the nine months ended December 31, 2025, rose to $19,177,000, up 29.5% from $14,779,000 in 2024[43]. Cash Flow and Financial Position - Cash provided by operating activities was $4.8 million for the quarter, with cash and cash equivalents totaling $22.3 million[11]. - Cash and cash equivalents increased to $22.3 million from $21.6 million at the end of the previous quarter[39]. - Cash and cash equivalents at the end of the period were $22,254,000, down from $30,046,000 at the end of the same period in 2024[41]. - Net cash provided by operating activities for the nine months ended December 31, 2025, was $16,084,000, a decrease from $27,873,000 in 2024[41]. - Total assets grew to $292.9 million, up from $264.1 million, indicating a strong financial position[39]. Expenses and Costs - SG&A expenses increased to $10.6 million, representing 18.6% of sales, a decrease of 200 basis points compared to the prior year[10]. - The company incurred approximately $7.0 million to $8.0 million in supplemental performance bonuses and other costs included in SG&A expenses[25]. - The company incurred acquisition and integration expenses of $157,000 for the nine months ended December 31, 2025, compared to a net income of $(900,000) in 2024[45]. Backlog and Industry Focus - Approximately 85% of the backlog as of December 31, 2025, was related to the Defense industry, providing stability and visibility to the business[16]. - Total backlog at the end of the quarter was not specified, but management emphasizes tracking orders and backlog as leading indicators of future performance[32]. - The company reported a book-to-bill ratio as a measure of growth prospects, although specific numbers were not provided[33]. Acquisition - The recent acquisition of FlackTek for $35.0 million enhances Graham's technology portfolio, focusing on advanced mixing and materials processing[17][18].