Graham Corporation (NYSE MKT: GHM) (“Graham” or the “Company”), a global business that engineers, manufactures, and sells critical equipment for the oil refining, petrochemical and power industries, and also supplies components and raw materials for nuclear energy facilities, announced that it was recently awarded three surface condenser orders totaling $7.5 million. Two of the orders are for new U.S. production capacity of chemical/petrochemicals in the Gulf Coast region. Lower feedstock and energy costs stemming from shale gas development have driven investments in chemical and petrochemical capacity. The third order is to support expansion of an oil refinery in Saudi Arabia. The projects are expected to ship during the latter half of fiscal 2015, which ends March 31, 2015.
“Over many decades, Graham has developed a solid reputation for delivering custom fabricated, high quality products and supporting end users from project inception to aftermarket support. We believe that our leadership position is demonstrated by our recent project wins for investments in new chemical and petrochemical capacity in North America as well as by continued demand for our equipment in the Middle East. We have won several projects during the past two quarters associated with the North American chemical industry renaissance and we believe that our bid pipeline presents us with further opportunities. While order releases by our key end markets appear to be gaining momentum, as is typical, we continue to expect ongoing variability in quarterly order levels,” stated James R. Lines, Graham’s President and Chief Executive Officer.
Graham has also increased its expected capital expenditure range for fiscal 2014, which ends March 31, 2014, to between approximately $6 million and $7 million, up from its previous expectation of $3.5 million to $4.5 million. The increase is for facility expansion on its main campus in Batavia, NY, and is driven by the Company’s expectations for continued growth in demand based on the strong fundamentals of the global energy and petrochemical industries as well as to support the Company’s long-term diversification strategy. The expansion is expected to be completed in the first half of fiscal 2015.
Mr. Lines concluded, “Our recent order activity, coupled with the quality of our bidding pipeline, prompt us to believe that now is the right time to initiate the expansion of our manufacturing capacity in Batavia. We believe that this expansion supports our strategy to double organic revenue during this current cycle.”