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Graham misses analysts’ expectations in Q2
Graham misses analysts’ expectations in Q2
Batavia’s Graham Corp. on Wednesday reported a 22 percent growth in second-quarter sales, but a net loss for the quarter of $500,000.
For the second quarter ended Sept. 30, the manufacturer posted revenues of $34.1 million, a $6.2 million increase from the second quarter of 2020. Increased revenues were driven by $16.5 million in sales associated with the acquisition of Barber Nichols, which offset lower sales to commercial energy markets.
Graham reported a $500,000 net loss for the quarter, compared with net income of $2.7 million in the same quarter last year. The losses in earnings were 5 cents per diluted share, compared with earnings of 27 cents a year ago.
Earnings missed Wall Street estimates by 10 cents per share, while sales were off by $830,000.
“We believe that our strategic expansion into a defense industry business was clearly demonstrated in the quarter. The addition of Barber Nichols is anticipated to help to offset the challenges which our energy and petrochemical business has been experiencing. We expect our energy and chemical markets to recover over the next twelve to twenty-four months. In addition, we will focus on growth opportunities in defense, renewable energy and commercial space,” President and CEO Daniel Thoren said in a statement.
Sales to the U.S. increased to $40.1 million, or 74 percent, of first-half net sales in fiscal 2022, up from $26.7 million, or 60 percent, of fiscal 2021 first-half net sales reflecting the impact of the BN acquisition. International sales were $14.2 million and represented 26 percent of total sales, compared with $18.0 million, or 40 percent, of sales in the same prior-year period.
“Barber Nichols has proven to be an excellent addition to Graham. Since we acquired the business in June, it has outperformed our revenue and EBITDA margin expectations,” said CFO Jeffrey Glajch. “Importantly, it is a critical element of our strategic expansion into the defense industry and provides the platform from which we can further diversify into renewable energy and commercial space.”
Shares of company stock (NYSE: GHM) were up less than 1 percent midday Wednesday at $13.26.
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