Graham Corporation reported higher sales, sharply stronger profitability and a record backlog for its fiscal second quarter ended September 30, 2026. The industrial technology maker attributed the results to strength across its markets, improved product mix and operating efficiencies, as well as revenue from its FlackTek acquisition.
The company reaffirmed its fiscal 2027 guidance for sales and adjusted EBITDA. It also highlighted continued investment in facilities serving defense and space markets.
Key details
- Sales rose 6% to $69.8 million. FlackTek contributed $9.5 million in quarterly revenue. Graham said sales growth reflected its diversified business and cited higher Defense sales, driven by project timing, new and existing programs, added capacity and FlackTek.
- Profitability improved faster than revenue. Gross profit increased 38% to $19.7 million, and gross margin expanded 6.5 percentage points to 28.2%. Graham attributed the margin improvement to a better mix of business and operating efficiencies.
- Quarterly earnings increased. Net income rose 50% to $4.6 million, or $0.39 per diluted share, up from $0.28 a year earlier. Adjusted earnings were $0.52 per share, up 68%; adjusted EBITDA grew 64% to $10.3 million, with its margin rising to 14.8% from 9.5%.
- Orders exceeded sales, and backlog reached another record. Orders were $73.7 million, producing a 1.1 book-to-bill ratio, meaning orders were higher than sales during the quarter. Backlog stood at $561.3 million, the seventh consecutive quarter in which Graham reported a record.
- Cash and debt position: Graham reported $46.7 million of cash provided by operating activities during the quarter. It ended September with $71.4 million in cash and no outstanding debt.
- Year-to-date results were also higher. For the first six months of fiscal 2027, sales rose 16% to $141.1 million, gross profit increased 29% to $37.5 million, and adjusted EBITDA climbed 45% to $19.1 million. Net income was up 11% to $8.5 million.
- The company reaffirmed its full-year fiscal 2027 sales and adjusted EBITDA guidance. The release did not provide the guidance figures in the material presented here.
- Facility and integration progress: Graham said FlackTek’s integration was progressing. It also completed its first customer test at a new cryogenic testing facility and broke ground on a new facility in Arvada. The company said these investments are intended to support opportunities in space and defense, advanced defense systems and small modular reactors.
What the results show
Graham’s quarterly margin gains and earnings growth outpaced its sales growth, while orders above sales and the larger backlog provide a substantial base of booked work. The company’s reported cash and debt figures also show it ended the quarter with cash on hand and no outstanding debt.