Graham Corporation reported significant financial growth in its latest 10-Q filing for the second quarter of fiscal 2025, ending September 30, 2024. Net sales reached $53.6 million, a 19% increase from $45.1 million in the same quarter of the previous year. For the first six months of fiscal 2025, net sales totaled $103.5 million, up from $92.6 million in the prior year, marking a 12% increase. The growth was driven by strong performance in the defense sector, which saw a 23% rise in sales, contributing $5.8 million to the quarterly increase. Additionally, the refining and chemical/petrochemical markets reported increases of 15% and 24%, respectively.

Gross profit for the quarter was $12.8 million, with a gross margin of 23.9%, reflecting a substantial improvement of 790 basis points compared to the previous year. This increase was attributed to higher sales volume, an improved sales mix, and better pricing strategies. The company also benefited from a $2.1 million grant for defense welder training programs, which contributed $435,000 to gross profit.

Net income for the second quarter was $3.3 million, a significant rise from $411,000 in the same quarter last year. Basic and diluted earnings per share were both $0.30, compared to $0.04 in the prior year. For the first half of fiscal 2025, net income reached $6.2 million, up from $3.1 million, with earnings per share increasing to $0.57 from $0.28.

Graham Corporation completed the acquisition of P3 Technologies, LLC on November 9, 2023, for a total purchase price of $11.2 million, which included cash and stock. This acquisition is expected to enhance the company’s capabilities in custom turbomachinery engineering and manufacturing, serving various industries including space and defense. The integration of P3 is ongoing, with expected synergies contributing to future growth.

The company’s cash and cash equivalents increased to $32.3 million as of September 30, 2024, up from $16.9 million at the end of the previous fiscal year, primarily due to strong cash flow from operations. Total assets rose to $249.5 million, while total liabilities increased to $127.8 million. The backlog of orders as of September 30, 2024, stood at $407 million, reflecting a robust demand outlook, particularly in the defense sector, which comprised 83% of the total backlog.

Graham Corporation continues to focus on strategic investments and operational improvements, with anticipated capital expenditures for fiscal 2025 projected between $13 million and $18 million, up from previous estimates. The company remains committed to enhancing its market position while navigating ongoing legal matters and compliance improvements following a recent investigation into misconduct at its subsidiary in India.