Third Quarter Fiscal 2026 Financial Results February 6, 2026 GRAHAM CORPORATION © 2025 GRAHAM CORPORATION, ALL RIGHTS RESERVED 1 Safe Harbor Regarding Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as "expects," "future," ...

Graham Corporation (NYSE:GHM) is included among the 12 Best HVAC Stocks to Buy Now. Northland Sees Graham Corporation (GHM) Near Full Value as Order Growth Slows Photo by Vitaly Taranov on Unsplash On January 27, Northland downgraded Graham Corporation (NYSE:GHM) to Market Perform from Outperform and raised its price target to $80 from $71. The firm remains constructive on Graham’s acquisition of FlackTek, which produces proprietary material processing solutions. Still, the analyst said the stock now ap ...

Illinois Tool Works (ITW) came out with quarterly earnings of $2.72 per share, beating the Zacks Consensus Estimate of $2.69 per share. This compares to earnings of $2.54 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +1.32%. A quarter ago, it was expected that this equipment manufacturer for the transportation, power, food and construction industries would post earnings of $2.69 per share when it actually produced earnings o ...

Industry Overview - The technology sector is experiencing growth due to digitalization, driven by the rapid deployment of Artificial Intelligence (AI) and cloud computing transition [1] - Strong adoption of AI technologies, including Generative AI and agentic AI, is increasing demand for high-performance computing and data-center infrastructure, leading to higher sales of semiconductors and related services [1] - Industrial automation is being enhanced by AI deployment, with increased usage of the Internet of Things, robotics, and automation [1] - Quantum computing, although in early stages, shows potential in solving complex problems in areas like drug discovery and logistics [1] Semiconductor Market - Massive investments in chips, particularly GPUs and customized accelerators, are driving semiconductor demand [4] - The Semiconductor Industry Association reported that semiconductor sales reached $75.3 billion in November 2025, a 29.8% year-over-year increase and a 3.5% month-over-month increase [4] - In October 2025, semiconductor sales were $72.7 billion, reflecting a 4.7% month-over-month increase and a 27.2% year-over-year increase [4] Company Performance and Earnings Estimates - Sandisk (SNDK) has an Earnings ESP of +3.07% and is expected to benefit from a shift in the NAND flash memory market, driven by AI applications [8][9] - The Zacks Consensus Estimate for Sandisk's earnings has increased to $3.26 per share, with the company set to report results on January 28, 2026 [10][11] - Amphenol (APH) has an Earnings ESP of +3.78% and is scheduled to report results on January 28, 2026, with a consensus earnings estimate of 93 cents per share, indicating 69.1% growth year-over-year [12][13] - ASML Holding has an Earnings ESP of +0.70% and is also set to report on January 28, 2026, with a consensus estimate of $8.85 per share, reflecting 21.2% growth year-over-year [14][16] - Corning (GLW) has an Earnings ESP of +1.72% and is scheduled to report on January 28, 2026, with a steady earnings estimate of 70 cents per share, suggesting 22.8% growth year-over-year [17][19] Investment Outlook - Leading hyperscalers like Amazon, Alphabet, and Microsoft are making multi-year investments to expand cloud capacity and support AI deployment, which bodes well for technology stocks [3] - The combination of strong earnings estimates and positive market trends positions several technology stocks favorably for potential earnings surprises [6][7]

Core Insights - Amphenol (APH) shares have increased by 96.4% over the past 12 months, significantly outperforming the Zacks Computer and Technology sector's return of 22.6% [1] - The company's growth is driven by its expanding portfolio in fiber optic, power, antenna, and sensor technologies, particularly in datacom, aerospace, and defense markets [1][8] - Amphenol's acquisition strategy has been a crucial factor in its business expansion [1][15] Stock Performance - APH has outperformed peers such as TE Connectivity (TEL), Corning (GLW), and Belden (BDC), which returned 62.6%, 87.5%, and 1.4% respectively over the same period [2] - The stock is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 34.93X, higher than the broader sector's 27.78X and its peers [6] Revenue and Growth Projections - Amphenol expects revenues of $25.56 billion and earnings per share (EPS) of $4 for 2025, driven by growth in datacom, defense, and industrial sectors [8] - The company anticipates mid-single-digit growth in defense and commercial aerospace sales in Q4 2025, with industrial sales expected to grow approximately 20% for the year [13] - IT Datacom sales are projected to more than double from 2024 to 2025 [13] Market Drivers - Rising AI workloads and cloud infrastructure upgrades are increasing demand for high-speed interconnects, benefiting APH's Communications Solutions segment [14] - Electrification in transportation and increased electronic content in medical devices are driving the adoption of Amphenol's products [14] Acquisition Strategy - Amphenol has been actively expanding its portfolio through acquisitions, including Trexon, Rochester sensors, and CommScope's Andrew business, which are expected to enhance its market position [15][16] - The pending acquisition of CommScope's Connectivity and Cable Solutions business is expected to generate $3.6 billion in sales and 26% EBITDA margins by 2025 [17] Financial Health - Amphenol reported operating cash flow of $1.47 billion in Q3 2025, representing 117% of net income, with free cash flow at $1.215 billion or 97% of net income [18] - Total liquidity at the end of Q3 was $10.9 billion, with net debt at $4.2 billion, positioning the company well for future acquisitions [19] Earnings Estimates - The Zacks Consensus Estimate for 2026 earnings is $4 per share, indicating a 21.4% growth from the 2025 estimate of $3.29 per share [20] - For Q1 2026, earnings are estimated at 85 cents per share, reflecting a 34.9% increase from the previous year [21] Conclusion - Amphenol's diversified end-market exposure, expanding interconnect portfolio, and effective acquisition strategy support strong growth visibility, justifying a premium valuation [22]

Core Insights - Amphenol (APH) shares have increased by 90.3% over the past year, significantly outperforming the Zacks Computer & Technology sector's return of 24.1% [1] - The company has experienced strong order growth, which rose by 38% year over year and 11% sequentially, reaching $6.11 billion [1] - Amphenol's diverse portfolio in fiber optic, power, antenna, and sensor technologies is gaining traction in datacom, aerospace, and defense markets [1][7] - The company's acquisition strategy has been a key driver of growth, with over 50 acquisitions in the past decade [8] Performance Comparison - Amphenol has outperformed peers such as TE Connectivity (TEL), Corning (GLW), and Belden (BDC) in the past year, with TE Connectivity and Corning returning 49.9% and 68.9%, respectively, while Belden shares fell by 8.2% [2] Growth Drivers - Rising AI workloads and cloud infrastructure upgrades are increasing demand for high-speed interconnects, benefiting APH's Communications Solutions segment [7] - Electrification in transportation and increased electronic content in medical devices are driving the adoption of Amphenol's cable assemblies and sensor-based systems [7] Acquisition Strategy - Amphenol continues to expand its market reach through targeted acquisitions, including the recent acquisition of Trexon for approximately $1 billion, expected to be accretive to earnings in the first year [8][12] - The pending acquisition of CommScope's Connectivity and Cable Solutions business will enhance Amphenol's interconnect product capabilities in the IT datacom market [10] Financial Strength - Amphenol reported operating cash flow of $1.47 billion in Q3 2025, representing 117% of net income, with free cash flow at $1.215 billion or 97% of net income [11] - Total liquidity at the end of Q3 was $10.9 billion, including $3.9 billion in cash and short-term investments, supporting further acquisitions and shareholder returns [12] - The company returned $354 million through dividends and share buybacks in Q3 2025 and raised its quarterly dividend by 52% to 25 cents per share, effective January 2026 [12] Earnings Estimates - The Zacks Consensus Estimate for Q4 2025 earnings is 92 cents per share, indicating a 67.3% growth year-over-year, with revenues expected to reach $5.84 billion, suggesting a 35.2% increase [13] - For the full year 2025, earnings are estimated at $3.29 per share, reflecting a 74.1% growth from 2024, with revenues projected at $22.74 billion, a 49.4% increase [14] Valuation - Amphenol shares are trading at a premium, with a forward 12-month price-to-earnings (P/E) ratio of 36.10X, higher than the broader sector average of 28.53X and peers like TE Connectivity and Corning [15] - The stock is currently trading above the 50-day and 200-day moving averages, indicating a bullish trend [18] Conclusion - Amphenol's diversified end-market exposure, expanding interconnect portfolio, and effective acquisition strategy support solid growth visibility, justifying its premium valuation [21]

Core Insights - GlobalFoundries Inc. (GFS) is a chip manufacturer specializing in RF, power, and embedded semiconductors, operating fabs in the United States, Europe, and Singapore [1] Company Overview - The company focuses on producing specialized semiconductor products, which are often overlooked by investors, particularly in the small- to mid-cap segment [1] Market Position - GlobalFoundries is also analyzed in the context of large-cap companies to provide a broader perspective on equity markets [1]

Financial Performance - Revenue for Q2 FY26 increased by $12.5 million, a 23% increase compared to the prior-year period[23] - Q2 FY26 gross profit increased by $1.5 million, a 12% increase[29] - The gross margin decreased by 220 bps to 21.7%[29] - Q2 FY26 GAAP Net Income was $3.1 million[11] - Adjusted EBITDA for Q2 FY26 was $6.3 million, a 12% increase[11] - The company expects net sales between $225 million and $235 million for FY26[47] Orders and Backlog - Q2 FY26 orders totaled $83.2 million[11] - The book-to-bill ratio for Q2 FY26 was 1.3x[11] - Record backlog reached $500.1 million[11] - Defense accounted for 85% of the backlog, Energy & Process 10%, and Space 5%[42] Strategic Investments and Acquisition - A new Navy Facility in Batavia, NY was completed in Q2 FY26, backed by a $13.5 million customer grant as part of a $17.6 million expansion[13] - Graham Corporation acquired Xdot Bearing Technologies for $1.5 million, including earn-outs[19]

Core Insights - Graham Corporation reported strong performance in the second quarter of fiscal 2026, with a record backlog of $500.1 million and healthy demand across its end markets, particularly in Defense and Space sectors [3][5][16]. Financial Performance - Net sales increased by 23% to $66.0 million compared to $53.6 million in the same quarter last year [5][7]. - Gross profit rose by 12% to $14.3 million, with a gross profit margin of 21.7%, down 220 basis points from the previous year [5][8]. - Net income per diluted share was $0.28, while adjusted net income per diluted share was $0.31, reflecting no change from the prior year [5][39]. - Adjusted EBITDA increased by 12% to $6.3 million, with an adjusted EBITDA margin of 9.5% [5][39]. Orders and Backlog - Orders for the quarter totaled $83.2 million, resulting in a book-to-bill ratio of 1.3x [5][14]. - The backlog at the end of the quarter was a record $500.1 million, a 23% increase year-over-year, with approximately 85% of the backlog attributed to the Defense industry [5][16]. Market Segments - Sales in the Defense market contributed $9.9 million to growth, driven by project milestones and new programs [7]. - The Energy & Process market saw an 11% increase in sales, primarily due to growth in China, although sales in India decreased due to project timing [7]. Cash Management and Balance Sheet - The company maintained a strong balance sheet with no debt, $20.6 million in cash, and access to $44.7 million under its revolving credit facility [5][11]. - Cash provided by operating activities for the quarter was $13.6 million [10]. Strategic Outlook - The company is focused on high-return initiatives to enhance productivity and profitability, including investments in automation and advanced testing technologies [3][5]. - Full-year fiscal 2026 guidance remains unchanged, with expectations for revenue between $225 million and $235 million and adjusted EBITDA between $22 million and $28 million [19][21].

Core Viewpoint - Illinois Tool Works (ITW) reported quarterly earnings of $2.81 per share, exceeding the Zacks Consensus Estimate of $2.69 per share, and showing an increase from $2.65 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was +4.46%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2] - Revenues for the quarter were $4.06 billion, slightly missing the Zacks Consensus Estimate by 0.55%, and up from $3.97 billion year-over-year [3] - The company has only topped consensus revenue estimates once in the last four quarters [3] Stock Performance and Outlook - ITW shares have increased approximately 1.5% since the beginning of the year, while the S&P 500 has gained 14.6% [4] - The future performance of the stock will largely depend on management's commentary during the earnings call and the earnings outlook [4][5] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $2.73 on revenues of $4.06 billion, and for the current fiscal year, it is $10.38 on revenues of $16.03 billion [8] Industry Context - The Manufacturing - General Industrial industry, to which ITW belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges ahead [9]