Graham Corporation Awarded $2.1 Million to Expand Welder Workforce to Support U.S. Navy’s Submarine Industrial Base Program

Rhea-AI Summary

Graham (NYSE: GHM) has been awarded $2.1 million to expand its welder training programs and related equipment. The contract, awarded by BlueForge Alliance, supports the U.S. Navy's Submarine Industrial Base initiatives. The funds will be used to increase production capacity at GHM's Batavia operation, including expanding its welding training program and increasing its skilled labor workforce by over 20%. GHM aims to complete this workforce expansion by early 2025 to support the U.S. Navy's submarine construction plans. This award reinforces GHM's position as a strategic supplier for the U.S. Navy's Submarine Industrial Base and demonstrates the company's commitment to enhancing its capabilities in the defense industry.

Positive

• Awarded $2.1 million contract to expand welder workforce
• Planned 20% increase in skilled labor workforce
• Strengthening position as strategic supplier for U.S. Navy's Submarine Industrial Base
• Expanding production capacity to support submarine construction plans

Negative

• None.

Financial Analyst

Graham 's recent $2.1 million award for welder workforce expansion is a positive development for the company's growth trajectory. This investment in human capital and equipment aligns with the increasing demand in the defense sector, particularly in submarine construction.

The funding, provided through the BlueForge Alliance, demonstrates GHM's strategic positioning within the U.S. Navy's supply chain. This not only enhances the company's revenue potential but also strengthens its competitive advantage in the defense industry. The planned 20% increase in skilled labor workforce by early 2025 indicates a significant scaling of operations, which could translate to improved production capacity and potentially higher revenues in the medium term.

However, investors should consider the following factors:

• The impact on short-term profitability, as training and expansion costs may initially outweigh immediate revenue gains
• The execution risk associated with rapidly scaling up a specialized workforce
• The long-term sustainability of defense spending, which can be subject to political and budgetary fluctuations

Overall, this development positions Graham favorably within the growing submarine industrial base, potentially leading to enhanced shareholder value if executed effectively.

Defense Industry Analyst

The $2.1 million award to Graham signifies the U.S. Navy's commitment to strengthening its submarine industrial base. This investment is part of a broader strategy to address critical skills shortages in the defense manufacturing sector, particularly in specialized areas like welding for submarine construction.

The involvement of BlueForge Alliance, a nonprofit integrator, underscores the collaborative approach being taken to bolster the defense supply chain. This model of public-private partnership is increasingly common in the defense sector, aiming to enhance efficiency and innovation.

Key implications for the defense industry include:

• Increased focus on domestic manufacturing capabilities for critical defense components
• Growing emphasis on workforce development in specialized technical skills
• Potential for similar initiatives across the broader defense industrial base

For Graham , this award not only provides financial support but also solidifies its position as a strategic supplier in the submarine manufacturing ecosystem. This could lead to further opportunities within the defense sector, potentially diversifying the company's revenue streams and reducing reliance on other industries.

However, the success of this initiative will depend on Graham's ability to effectively train and retain skilled welders in a competitive labor market. The defense industry's long-term outlook remains positive, driven by geopolitical tensions and the need for technological advancement in naval capabilities.

BATAVIA, N.Y.--(BUSINESS WIRE)-- Graham Corporation (NYSE: GHM) (“GHM” or “the Company”), a global leader in the design and manufacture of mission critical fluid, power, heat transfer, and vacuum technologies for the defense, space, energy, and process industries, announced today that it has been awarded $2.1 million for the expansion of its welder training programs and related equipment. The contract was awarded by BlueForge Alliance, a nonprofit, neutral integrator that supports the U.S. Navy’s Submarine Industrial Base initiatives.

Daniel J. Thoren, President and CEO of GHM, commented, “These are exciting times for our Company as we build out our capabilities and capacity to support America’s defense industry as a part of the U.S. Navy’s Submarine Industrial Base. These funds will help us develop and grow our welder workforce and provide additional equipment needed to improve the efficiency of our production processes. We are proud to be a strategic supplier for the U.S. Navy’s Submarine Industrial Base.”

The funds will be used to increase the Company’s production capacity at its Batavia operation which includes expanding its welding training program and increasing its skilled labor workforce by more than 20 percent. The Company expects to accomplish the workforce expansion by early 2025 to support the U.S. Navy’s submarine construction cadence plans.

About Graham Corporation
Graham is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the defense, space, energy, and process industries. Graham Corporation and its family of global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps, and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems. Graham Corporation routinely posts news and other important information on its website, grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.

About BlueForge Alliance
BlueForge Alliance is a nonprofit, neutral integrator that supports the U.S. Navy’s Submarine Industrial Base initiatives and efforts to strengthen and sustain the maritime manufacturing sector. BFA is a critical partner in the SIB’s mission to ensure industry has the capability, capacity, and resilience to build and maintain America’s next generation of undersea platforms. The organization’s team of experts in a variety of disciplines focus on addressing critical workforce, technology, and supplier development needs. BFA is headquartered in Bryan/College Station, Texas. For more information, visit www.BlueForgeAlliance.us.

Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “expects,” “anticipates,” “potential,” “will,” and other similar words. All statements addressing operating performance, events, or developments that Graham Corporation expects or anticipates will occur in the future, including but not limited to, winning potential future or multi-year orders, potential revenues and timing of such revenues, capacity, demand growth, and delivering timely or otherwise on schedule are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Graham Corporation’s most recent Annual Report filed with the Securities and Exchange Commission, including under the heading entitled “Risk Factors,” its quarterly reports on Form 10-Q, and other filings it makes with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize or should any of Graham Corporation’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on Graham Corporation’s forward-looking statements. Except as required by law, Graham Corporation disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725904233/en/

For more information:

Christopher J. Thome

Vice President - Finance and CFO

Phone: (585) 343-2216

Deborah K. Pawlowski

Kei Advisors LLC

Phone: (716) 843-3908

dpawlowski@keiadvisors.com

Source: Graham Corporation

FAQ

What is the value of the contract awarded to Graham (GHM) for welder workforce expansion?

Graham (GHM) has been awarded a $2.1 million contract to expand its welder training programs and related equipment.

By what percentage does Graham (GHM) plan to increase its skilled labor workforce?

Graham (GHM) plans to increase its skilled labor workforce by more than 20% to support the U.S. Navy's submarine construction cadence plans.

When does Graham (GHM) expect to complete its workforce expansion?

Graham (GHM) expects to accomplish the workforce expansion by early 2025.

Who awarded the contract to Graham (GHM) for welder workforce expansion?

The contract was awarded to Graham (GHM) by BlueForge Alliance, a nonprofit, neutral integrator that supports the U.S. Navy's Submarine Industrial Base initiatives.