Graham Corporation Wins Over $65 Million in Defense and Space Industry Contracts for Mission Critical Turbomachinery and Cryogenic Pump Products

Rhea-AI Summary

Graham (NYSE: GHM) has secured three contracts totaling over $65 million in the defense and space industries. The contracts include:

1. Providing the MK19 Air Turbine Pump assembly for the Columbia-class submarine

2. Supplying cryogenic recirculation pumps for space launch vehicles

3. An additional option year for alternators and regulators supporting the MK48 Mod 7 Heavyweight Torpedo program

These contracts highlight GHM's expanded capabilities in serving the defense and space sectors. The company's Arvada, Colorado operations will manufacture the products, with revenue recognition spread over the next three to eight years.

Positive

• Secured contracts worth over $65 million in defense and space industries
• Won new contract for MK19 Air Turbine Pump assembly for Columbia-class submarine
• Awarded contract for cryogenic recirculation pumps for space launch vehicles
• Received additional option year for MK48 Mod 7 Heavyweight Torpedo program
• Expanded capabilities and capacity in defense and space sectors

Negative

• None.

Financial Analyst

Graham 's $65 million in new defense and space contracts is a significant win, potentially boosting revenue and profitability. The multi-year nature of these contracts provides stable, long-term cash flow, which is particularly valuable in the current economic climate. The company's success in securing these contracts through competitive bidding demonstrates its strong market position and technological edge.

The diversification across submarine, torpedo and space launch vehicle projects reduces risk and expands GHM's footprint in high-value sectors. The Columbia-class submarine contract is especially noteworthy, as it opens up a new program line that could lead to future opportunities. Investors should note that while these contracts support the fiscal 2025 outlook, their long-term nature (up to 8 years for the MK19 program) suggests a positive impact on future fiscal years as well.

Defense Industry Expert

These contract wins underscore Graham 's growing importance in the defense supply chain. The MK19 air turbine pump for the Columbia-class submarine is a important component, highlighting GHM's ability to meet the stringent requirements of naval systems. The continued involvement in the MK48 Mod 7 Heavyweight Torpedo program through a second option year demonstrates the reliability and performance of GHM's products in critical defense applications.

The company's expansion into space launch vehicle components with the cryogenic recirculation pump contract shows its adaptability to emerging markets. This diversification could shield GHM from potential defense budget fluctuations. The emphasis on "mission critical" components positions GHM as an essential supplier, potentially leading to more stable, long-term relationships with major defense contractors and government agencies.

Aerospace Engineer

Graham 's entry into providing cryogenic recirculation pumps for space launch vehicles is a strategic move into the rapidly growing commercial space sector. These pumps are critical for thermal conditioning of upper stage engines, which is essential for optimal performance during space missions. The company's expertise in fluid and heat transfer technologies positions it well to capitalize on the increasing demand for reliable space launch components.

The long-term nature of defense contracts, coupled with the potential for recurring business in the space sector, could provide GHM with a stable revenue stream and opportunities for technological advancement. As the space industry continues to expand, GHM's involvement in this sector could lead to additional contracts and partnerships with major aerospace companies, potentially driving future growth and innovation within the company.

• Secures new contract to provide the MK19 Air Turbine Pump assembly for the Columbia-class submarine
• Wins new contract to provide cryogenic recirculation pumps for space launch vehicles
• Awarded another option year for alternators and regulators to support the MK48 Mod 7 Heavyweight Torpedo program

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, today announced that it was awarded three contracts with a combined value of over $65 million.

Matthew Malone, Vice President, Graham Corporation and General Manager - Barber-Nichols, commented, “We believe the investments we have made in our engineering and operations to expand our capacity and increase our capabilities to serve the defense and space industries led to our being awarded these contracts. We differentiated our solutions through our strong customer relationships, engineering expertise, precision manufacturing capabilities and rigorous testing and qualification processes. Our solutions are vital components that meet the high-level performance requirements for mission critical applications. We appreciate our customers’ confidence to select us for these high-value projects.”

The second option year award supporting the MK48 Mod 7 Heavyweight Torpedo program was received in the first quarter of fiscal 2025 which ended June 30, 2024. The Company will continue to provide alternators and regulators for this program. The contract award for the Company to provide the MK19 air turbine pump for the torpedo ejection system on the Columbia-class submarine was awarded in the second quarter of fiscal 2025 ending September 30, 2024. This is a new program for the Company and was won through a competitive bid process.

Also awarded in the second quarter was a contract to provide the cryogenic recirculation pump that provides thermal conditioning for upper stage engines on launch vehicles in space. The products for all three of these contracts will be manufactured at the Company’s Arvada, Colorado operations.

The revenue for the contracts to provide the second-stage cryogenic recirculation pump and to support the MK48 Mod 7 Heavyweight Torpedo program will be recognized over varied periods for the next three years while revenue for the MK19 program will be recognized over varied periods for the next eight years. The revenue from these awards had been considered in the Company’s outlook for fiscal 2025.

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.

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 “believe,” “expects,” “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, 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/20240805588155/en/

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 total value of the new contracts won by Graham (GHM)?

Graham (GHM) has won contracts with a combined value of over $65 million in the defense and space industries.

What specific products will Graham (GHM) provide for the Columbia-class submarine?

Graham (GHM) will provide the MK19 Air Turbine Pump assembly for the torpedo ejection system on the Columbia-class submarine.

What is the purpose of the cryogenic recirculation pumps Graham (GHM) will supply?

Graham (GHM) will supply cryogenic recirculation pumps that provide thermal conditioning for upper stage engines on launch vehicles in space.

How long will Graham (GHM) recognize revenue from these new contracts?

Graham (GHM) will recognize revenue from these contracts over varied periods for the next three to eight years, depending on the specific contract.