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Graham Corporation Reports Third Quarter Fiscal 2022 Results

BATAVIA, NY, February 7, 2022 – Graham Corporation (NYSE: GHM), a global business that designs, manufactures, and sells critical equipment for the defense/space, energy/new energy, and chemical/petrochemical industries, today reported financial results for its third quarter and nine months ended December 31, 2021, of the fiscal year ending March 31, 2022 (“fiscal 2022”).  Financial results include those of Barber-Nichols (“BN”) from the date it was acquired on June 1, 2021. 

Daniel J. Thoren, President and CEO, commented, “While we are executing on our diversification strategy to increase our participation in the defense industry and more than half of our revenue in the third quarter was generated from tier one defense contractors, there are clearly challenges within our Batavia, NY defense operations.  We understand the issues and we are aggressively taking steps to resolve them.”   
He noted, “The current high volume of defense work has exceeded the labor capacity of our Batavia facility, as its growth inflection coincided with the COVID-19 pandemic onset.  To maintain critical schedules on two major Navy projects, we chose to incur substantial additional costs, primarily through the use of contract welders and outsourcing commercial work where possible.  This led to significant cost overruns and drove the disappointing results in the quarter, the breach of our financial covenants under our term loan and revolving credit facility, and the need to suspend our dividend.  We believe the long-term benefit of maintaining our position with our defense customers outweighed the short-term cost.  We expect the need for these extraordinary additional costs for these two large U.S. Navy projects will be largely behind us after the first half of fiscal 2023. 

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