Q4 2024 Graham Corp Earnings Call Transcript
Key Points
- Graham Corp (GHM) achieved record revenue and orders in fiscal 2024, demonstrating strong financial performance.
- The company eliminated its debt and refinanced for more flexibility and lower rates.
- Significant investments were made to grow the business both organically and inorganically, including the acquisition of P3 Technologies.
- Gross margin expanded significantly, reflecting higher volume, improved absorption, and better pricing on defense contracts.
- The company received a $13.5 million strategic investment from a major defense customer to expand and enhance production capabilities.
- SG&A expenses were higher than expected, partly due to increased performance-based compensation and professional fees.
- There is still some lower-margin first article work in the backlog, which may drag on gross margins in fiscal 2025.
- The defense orders tend to be lumpy, which can cause variability in financial performance.
- The company faces challenges in hiring and training sufficient direct labor to meet production demands.
- The commercial market, particularly in China, remains slow, impacting new capital project opportunities.
Greetings. Welcome to the Graham Corporation's fourth-quarter fiscal year 2024 financial results conference call. (Operator Instructions) Please note, this conference is being recorded. At this time, I will now turn the conference over to Debbie Pawlowski, Investor Relations for Graham Corp. Debbie, you may now begin.
Thank you, Rob, and good morning, everyone. We certainly appreciate your time today and your interest in Graham Corporation. Here with me on the call are Dan Thoren, our President and CEO; and Chris Thome, our Chief Financial Officer. Dan and Chris are going to provide their formal remarks, after which we will open the line for questions.
You should have a copy of the fourth-quarter and full-year 2024 financial results that were released this morning. If not, you can access the release on our website at ir.grahamcorp.com. You will find there as well the slides that will accompany today's discussion.
If you turn to slide 2, I will review the Safe Harbor statement. You should be aware that
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