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Graham Corporation (NYSE Amex: GHM) a manufacturer of critical equipment for energy, petrochemical and other process industries, today announced that it has been awarded two orders from refinery customers totaling approximately $3 million.
One order is for an upgrade to an existing Graham ejector system at a U.S. refinery that is being reengineered to expand the refiner’s capability to process a wider variety of crude feedstock. The order is expected to ship in the second quarter of Graham’s fiscal year 2011, which begins on April 1, 2010.
The second order is for custom-engineered steam surface condensers to be installed at a large oil refinery currently under construction in the Middle East and is Graham’s third order related to this project. The two previous orders are currently in backlog. Shipment of the condensers is scheduled for the fourth quarter of fiscal year 2011. With this most-recent order, Graham has now received approximately $23 million in bookings from major refinery projects that are currently moving forward in the region, although the Company does not expect that additional significant orders will be released for the major refinery projects in that region for the next nine to 18 months.
Graham’s total order activity for the third quarter of fiscal year 2010, which ended December 31, 2009, was approximately $51.6 million. Such amount represents orders received from a variety of markets, including refining, chemical processing, power generation and fertilizer for projects in China, Indonesia, Thailand, India, Mexico, Saudi Arabia and the United States. Included in the $51.6 million was a very large order, exceeding $25 million, from Northrop Grumman Shipbuilding for the supply of four steam surface condensers for the U.S. Navy's second aircraft carrier of the Gerald R. Ford class, the unnamed CVN 79. Revenue for the large order for the U.S. Navy aircraft carrier is expected to be recognized beginning in fiscal 2012 and is expected to continue to be recognized into fiscal 2014.
Consistent with its prior guidance, Graham continues to expect that revenue for fiscal year 2010, which ends March 31, 2010, will be in the range of $60 million to $65 million and gross margin will be in the 33% to 35% range.
James R. Lines, Graham’s President and Chief Executive Officer, commented, “Throughout the downturn in our primary industries that began over 18 months ago, Graham’s focus has been on strengthening customer relationships in order to identify and win potential orders in an extremely competitive environment. We believe that the recent robust order level and the diversity of end-user markets and geographies are encouraging signs. Because we historically have tended to lag economic recovery by nine to 18 months, we believe that sales over the next few quarters will continue to reflect the sporadic nature of order receipt that began over a year ago. However, we also believe this should be the bottom of the cycle for us, and we expect to begin to see revenue growth during the second half of fiscal 2011.”