(Mark One) |
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 16-1194720 | |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
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20 Florence Avenue, Batavia, New York | 14020 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer
o
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Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
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(Do not check if a smaller reporting company) |
2
4
5
6
7
8
9
10
11
12
13
14
15
September 30,
March 31,
2009
2009
(Amounts in thousands, except per share data)
$
4,640
$
5,150
50,063
41,059
8,207
6,995
5,555
10,444
3,646
4,665
1,868
4,054
656
375
74,635
72,742
9,523
9,645
196
224
4,423
4,300
7
13
$
88,784
$
86,924
$
28
$
28
5,483
5,514
3,649
4,630
1,926
2,266
4,055
5,892
4,953
4,865
20,094
23,195
17
31
274
250
1,356
1,253
251
256
843
828
22,835
25,813
1,015
1,013
15,174
14,923
58,558
53,966
(6,240
)
(6,460
)
(2,554
)
(2,325
)
(4
)
(6
)
65,949
61,111
$
88,784
$
86,924
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Three Months Ended
Six Months Ended
September 30,
September 30,
2009
2008
2009
2008
(Amounts in thousands, except per share data)
$
16,108
$
23,915
$
36,246
$
51,562
10,254
13,416
22,114
28,845
5,854
10,499
14,132
22,717
3,032
3,931
6,280
7,753
(15
)
(172
)
(33
)
(303
)
33
2
34
3
96
96
3,146
3,761
6,377
7,453
2,708
6,738
7,755
15,264
1,240
2,326
2,769
5,168
1,468
4,412
4,986
10,096
57,287
42,786
53,966
37,216
(197
)
(203
)
(394
)
(354
)
37
$
58,558
$
46,995
$
58,558
$
46,995
$
.15
$
.43
$
.50
$
1.00
$
.15
$
.43
$
.50
$
.99
9,903
10,169
9,894
10,127
9,937
10,249
9,926
10,227
$
.02
$
.02
$
.04
$
.035
Table of Contents
Six Months Ended
September 30,
2009
2008
(Amounts in thousands)
$
4,986
$
10,096
840
530
(30
)
(293
)
198
257
3
(1
)
98
1,267
(1,212
)
(3,591
)
4,892
2,864
1,018
(1,236
)
2,185
(1,277
)
(281
)
(117
)
(122
)
(3,574
)
(134
)
(18
)
(1,323
)
(176
)
(1,838
)
(379
)
34
50
9,314
4,402
(282
)
(795
)
7
1
(86,613
)
(61,437
)
77,640
58,600
(9,248
)
(3,631
)
198
2,450
(211
)
(2,464
)
34
695
(394
)
(354
)
(229
)
(14
)
21
1,696
2
2
(579
)
2,011
3
150
(510
)
2,932
5,150
2,112
$
4,640
$
5,044
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Table of Contents
Table of Contents
September 30,
March 31,
2009
2009
$
1,676
$
1,929
3,080
4,664
729
695
5,485
7,288
1,839
2,623
$
3,646
$
4,665
Table of Contents
Three Months Ended
Six Months Ended
September 30,
September 30,
2008
2009
2008
5 years
3 years
5 years
64.17
%
99.04
%
61.80
%
3.25
%
1.52
%
3.22
%
.23
%
.36
%
.28
%
Table of Contents
Three Months Ended
Six Months Ended
September 30,
September 30,
2009
2008
2009
2008
$
1,468
$
4,412
$
4,986
$
10,096
9,845
10,108
9,838
10,060
58
61
56
67
9,903
10,169
9,894
10,127
$
.15
$
.43
$
.50
$
1.00
$
1,468
$
4,412
$
4,986
$
10,096
9,903
10,169
9,894
10,127
32
80
31
100
2
1
9,937
10,249
9,926
10,227
$
.15
$
.43
$
.50
$
.99
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Three Months Ended
Six Months Ended
September 30,
September 30,
2009
2008
2009
2008
$
318
$
367
$
366
$
441
(21
)
96
(74
)
64
(18
)
(106
)
(13
)
(148
)
$
279
$
357
$
279
$
357
Table of Contents
Three Months Ended
Six Months Ended
September 30,
September 30,
2009
2008
2009
2008
$
1,468
$
4,412
$
4,986
$
10,096
2
2
3
141
109
9
217
(524
)
$
1,579
$
4,423
$
5,206
$
9,713
Three Months Ended
Six Months Ended
September 30,
September 30,
2009
2008
2009
2008
$
79
$
112
$
158
$
225
325
309
649
618
(464
)
(459
)
(929
)
(918
)
1
1
2
2
204
50
409
100
$
145
$
13
$
289
$
27
Table of Contents
Three Months Ended
Six Months Ended
September 30,
September 30,
2009
2008
2009
2008
$
$
$
$
15
15
30
30
(42
)
(42
)
(83
)
(83
)
6
6
11
12
$
(21
)
$
( 21
)
$
(42
)
$
(41
)
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Before
Remeasurement of
After Remeasurement
Plan Assets and
of Plan Assets and
Balance Sheet Caption
Obligations
Adjustments
Obligations
$
4,186
$
(801
)
$
3,385
$
(315
)
$
260
$
(55
)
$
(949
)
$
35
$
(914
)
$
1,820
$
543
$
2,363
$
(37,216
)
$
(37
)
$
(37,253
)
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16
17
18
19
20
21
22
23
24
25
26
27
28
29
Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations
Net income and income per diluted share for the second quarter of fiscal 2010
were $1,468 and $0.15, respectively, compared with net income of $4,412 and income
per diluted share of $0.43 for the second quarter of the fiscal year ended March
31, 2009 (fiscal 2009). Net income and income per diluted share for the first
six months of fiscal 2010 were $4,986 and $0.50, respectively, compared with net
income of $10,096 and income per diluted share of $0.99 for the first six months of
fiscal 2009.
Net sales for the second quarter of fiscal 2010 were $16,108, down 33% compared
with $23,915 for the second quarter of fiscal 2009. Net sales for the first six
months of fiscal 2010 were $36,246, down 30% compared with net sales of $51,562 for
the first six months of fiscal 2009.
Orders booked in the second quarter of fiscal 2010 were $29,567, up 69% compared
with the second quarter of fiscal 2009, when orders were $17,451. Orders booked in
the first six months of fiscal 2010 were $38,405, down 15% compared with orders
booked of $45,251 in the first six months of fiscal 2009. The order level in the
second quarter of fiscal 2010 includes a large refinery project in Saudi Arabia,
which is not expected to be converted to sales until the middle of fiscal 2011.
Backlog increased to $50,469 at September 30, 2009, representing a 36% increase
compared with June 30, 2009, when our backlog was $37,045. We believe 65% of
current backlog will convert to sales over the next 12 months. Normally, 85-90% of
the backlog is expected to convert to sales within the next 12 months.
Gross profit margin for the three and six-month period ending September 30, 2009
was 36% and 39%, respectively, compared with 44% for both the three and six-month
periods ending September 30, 2008.
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Cash and short-term investments at September 30, 2009 were $54,703 compared with
$46,209 at March 31, 2009.
the current and future economic environments affecting us and the markets we
serve;
sources of revenue and anticipated revenue, including the contribution from the
growth of new products, services and markets;
plans for future products and services and for enhancements to existing products
and services;
estimates regarding our liquidity and capital requirements;
our ability to attract or retain customers;
the outcome of any existing or future litigation;
our acquisition strategy; and
our ability to increase our productivity and capacity.
Table of Contents
a shift away from the U.S. refining market driven by lower demand, lower
refinery utilization and uncertainty around U.S. energy policy (and the impact that
energy policy may have on production costs);
delays in North American oil sands investments due to construction costs and
uncertainty around U.S. energy policy (and the impact that energy policy may have
on production costs);
Middle East demand increases, which are beginning to drive renewed activity; the
re-starting of delayed projects in both petrochemical and refining industries, such
as the Jubail and Yanbu refinery projects (as construction costs for these projects
have reportedly been reduced by 20%);
Asia, specifically China, seeing renewed demand in the first half of calendar
year 2009, following calendar year 2008 reductions in demand, which in turn are
driving new investment in petrochemical and refining projects; and
South America, specifically Brazil, Venezuela and Columbia, refining and
petrochemical investments driven by increased local demand.
Global consumption of crude oil is estimated to expand significantly over the
next two decades, primarily in developing countries. This is expected to offset
flat to slightly declining demand in North America and Europe.
Increased demand is expected for power, refinery and petrochemical products,
stimulated by the expanding middle class in Asia.
Increased need in certain regions for geothermal electrical power plants is
expected to meet increased projected electricity demand.
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Increased global regulations over the refining and petrochemical industries are
expected to continue to drive requirements for capital investments.
Construction of new petrochemical plants in the Middle East, where natural gas
is plentiful and less expensive, is expected to continue.
Increased new power investments are expected in Asia and South America to meet
projected consumer demand increases.
Global oil refining capacity needs are projected to increase, which are expected
to be addressed through new facilities, refinery upgrades, revamps and expansions.
Long-term growth potential is believed to exist in emerging energy market
opportunities, such as coal-to-liquids, gas-to-liquids and other emerging
technologies, such as biodiesel, ethanol and waste-to-energy.
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Three Months Ended
Six Months Ended
September 30,
September 30,
2009
2008
2009
2008
$
16,108
$
23,915
$
36,246
$
51,562
$
1,468
$
4,412
$
4,986
$
10,096
$
0.15
$
0.43
$
0.50
$
0.99
$
88,784
$
83,318
$
88,784
$
83,318
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September 30,
March 31,
2009
2009
$
54,703
$
46,209
54,541
49,547
3.7
3.1
$
17
$
31
0
%
0
%
4.2
%
4.1
%
(1)
Working capital ratio equals current assets divided by current liabilities.
(2)
Long-term debt/capitalization equals long-term debt divided by stockholders equity
plus long-term debt.
(3)
Long-term liabilities/capitalization equals total liabilities minus current liabilities
divided by stockholders equity plus long-term debt.
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Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Table of Contents
Item 4.
Controls and Procedures
Table of Contents
Item 4.
Submission of Matters to a Vote of Security Holders
Nominees
Votes For
Votes Withheld
8,358,225
336,899
8,216,097
479,027
8,385,784
309,340
8,474,348
197,016
23,760
Item 6.
Exhibits
Table of Contents
GRAHAM CORPORATION
By:
/s/
Jeffrey Glajch
Jeffrey Glajch
Vice President-Finance & Administration and
Chief Financial Officer
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#
Management contract or compensatory plan.
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GRAHAM CORPORATION | |||||
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By: |
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[SEAL]
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RSA HOLDER | |||||
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(a) | the tenth anniversary of the date first above written; | ||
(b) | in the case of the Option Holders Retirement, the tenth anniversary of the date first above written (Retirement being defined in Section 4(a) hereof); | ||
(c) | the first anniversary of the Option Holders termination of employment with the Company due to his death or Disability; and |
(d) | within three months from the date of the Option Holders termination of employment with the Company for any reason not described in section 2(a) or section 2(b). |
(a) | If to the Committee: | ||
Graham Corporation
20 Florence Avenue Batavia, New York 14020 Attention: Chief Accounting Officer |
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GRAHAM CORPORATION | |||||
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By: |
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Assistant Secretary
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[SEAL] | OPTION HOLDER: | |||||||
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Name: | |||||||
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Date: |
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Re: | Notice of Exercise of Non-Qualified Stock Option (Employees) |
o | Exercise and Sell | ||
o | Exercise and Hold |
Date
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Received [check one]: | o | By Hand | o | By Mail Post Marked |
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By
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(a) | If to the Committee: |
Graham Corporation
20 Florence Avenue Batavia, New York 14020 Attention: Chief Accounting Officer |
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GRAHAM CORPORATION | |||||
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By: |
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[SEAL]
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RSA HOLDER | |||||
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1. | I have reviewed this Quarterly Report on Form 10-Q of Graham Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d 15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/
James R. Lines
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President and Chief Executive Officer
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1. | I have reviewed this Quarterly Report on Form 10-Q of Graham Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d 15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/
Jeffrey Glajch
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Vice President-Finance & Administration and
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Chief Financial Officer
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/s/
James R. Lines
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/s/
Jeffrey Glajch
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James R. Lines
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Jeffrey Glajch | |||||
President and Chief Executive Officer
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Vice President-Finance & Administration and | |||||
(Principal Executive Officer)
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Chief Financial Officer | |||||
Date: November 3, 2009
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(Principal Financial Officer) | |||||
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Date: November 3, 2009 |