Graham (GHM) Oppenheimer 21st Annual Industrial Growth Virtual Conference summary

Strategic Transformation and Growth

• Over the past five years, there has been a significant turnaround in profitability, backlog growth, and operational agility, driven by executive transitions and a renewed focus on growth and reinvestment in high-ROIC opportunities.

• Completed a transformation from stabilization to an 'Improve to Growth' phase, emphasizing operational excellence, disciplined capital allocation, and proprietary technology.

• Three-year plan targets 8–10% organic revenue CAGR and >14% ROIC, with incremental margin expansion and selective M&A.

• Investments in facilities, automation, and digital systems support capacity, efficiency, and global expansion.

• Focus on talent acquisition, retention, and leadership development to sustain growth.

Defense Sector Revitalization and Facility Expansion

• Revitalized relationship with the U.S. Navy through investments in talent, technology, and apprenticeship programs, leading to improved performance and government grants totaling nearly $20 million.

• Expansion includes a new 30,000 sq ft Navy facility with plans for two more bays, and a 40,000 sq ft build in Arvada, Colorado, with facilities designed for dual commercial and defense use.

• Facility build cycles are demand-driven, with the Arvada project expected to complete in about 18 months.

• Defense segment embedded on long-cycle strategic platforms, >80% sole-source content, and strong backlog visibility; revenue CAGR of 24% since FY22.

• Record backlog and bookings provide stability and visibility; book-to-bill ratio averaged 1.3x over five years.

Integration and Innovation Post-Acquisition

• Integration of Barber-Nichols has doubled its backlog and enabled significant capital reinvestment, with both entities benefiting from shared leadership and innovation cycles.

• Innovation at Barber-Nichols is analytically driven, while Graham’s approach is empirical; synergies are being leveraged to accelerate R&D and product development.

• Maintaining competitive differentiation between business units is emphasized to maximize strengths.

• Recent acquisitions (Barber Nichols, P3 Technologies, FlackTek) have expanded capabilities, diversification, and growth potential.

• FlackTek acquisition expands into high-growth, automation-enabled mixing solutions with recurring revenue streams.