Graham (GHM) investor relations material

Executive summary

• Achieved record Q1 FY27 net sales of $71.3 million, up 29% year-over-year, driven by strong Defense and Space market growth and the FlackTek acquisition, which contributed $6.6 million in sales.

• Adjusted EBITDA rose 28% to $8.8 million; adjusted net income per diluted share increased 9% to $0.49; GAAP net income declined 15% to $3.9 million due to margin mix and higher costs.

• Orders totaled $95.9 million (1.3x book-to-bill), and backlog reached a record $557 million, up 15% year-over-year, providing strong visibility for future growth.

• Balance sheet strengthened with $27 million in cash and no debt after a $50 million equity raise and $13 million debt repayment.

• Fiscal 2027 guidance reaffirmed, reflecting confidence in continued profitable growth and robust end-market demand.

Financial highlights

• Gross profit rose 21% to $17.8 million; gross margin was 25.0%, down 150 bps year-over-year due to higher Defense sales with lower margins.

• Adjusted EBITDA margin was 12.3%; net income margin was 5.5%.

• SG&A expenses increased 33%, mainly from FlackTek integration, acquisition costs, and investments in personnel and technology.

• Book-to-bill ratio was 1.3x for the quarter; approximately 35–40% of backlog expected to convert to sales in the next 12 months.

• Cash and cash equivalents increased to $27 million, aided by the equity raise; net cash used in operating activities was $12.7 million due to timing of receivables and bonus payments.

Outlook and guidance

• Fiscal 2027 net sales expected at $285–$295 million; adjusted EBITDA guidance $35–$40 million (13% margin midpoint); gross margin forecasted at 24.5%–25.5%; SG&A at 16.5%–17.5% of sales.

• Capital expenditures projected at $18–$22 million, including new facility construction.

• Effective tax rate expected at 18%–20%.

• Long-term framework targets 8%–10% organic revenue growth and 14%–16% adjusted EBITDA margin by fiscal 2029.