Good morning, everyone, and thank you for joining us this morning for Graham Corporation's Fourth Quarter Fiscal Year 2022 Earnings Results Conference Call combined with our Strategy Briefing Webinar, and we're really happy that you can be joining us here today. You should have the results of 2022 financial results and the new strategic plan precedences that were released over the wire last night. You should also have the slides that accompany our conversation today that were pushed out earlier this morning. All of these materials, if you don't have them, can be found on our Web site at grahamcorp.com. Let me tell you a little bit about the format for this morning. We're first going to start by reviewing our fourth quarter and fiscal year 2022 results. Then we will go to a briefing on our strategy, after which we will open it up for Q&A. Now throughout the webinar, you can actually submit any questions that you might have through the Q&A chat platform on the webinar portal. And alternatively, if you would like to ask your questions live on the last slide that I'm not going to show until I get there, but you have the slides, we do have a phone number that you can dial into, and those questions then will be handled very similarly to when a normal conference call is done. So I hope you enjoy this platform. But we felt that for a strategy briefing, it was important that it was a more formalized platform where you could see us presenting the materials. And who is presenting today? So let me start by introducing Dan Thoren, our President and CEO. Dan was appointed as President and CEO in just September of 2021. And I also have joining us Chris Thome, our new…

Thank you, Debbie, and good afternoon, everybody. Thanks for joining us today. I'm eager to tell you about both our results and our strategy as we have been working hard to build better companies to deliver a superior performance. We'll start with an overview of the fourth quarter. Overall, we are encouraged by our results. The improvements we have been making to stabilize our Batavia operations and Barber-Nichols continues to perform above expectations. For the quarter, we met our revised guidance with sales of $39.7 million and adjusted EBITDA of $400,000. For the year, sales were 122.8 million and adjusted EBITDA was a $5 million loss. Barber-Nichols and our Graham commercial aftermarket business continued to perform well and made a positive contribution to both our top and bottom lines. As a result of the Barber-Nichols acquisition, we ended the year with over half of our fiscal 2022 orders coming from defense and space, with backlog over 80% in defense and space as well. This backlog will help us mitigate the cyclicality associated with our energy and chemical business. For Graham Manufacturing in Batavia, we saw Navy first article overruns continuing in the fourth quarter, along with supply chain delays in our commercial business. In the third quarter earnings call, I talked about our commitment to meet critical Navy milestones. I'm happy to report we have made good progress there, and we'll give you more detail on the next slide. Let's move to the next slide. Here I'd like to review the corrective actions and improvements we have made over the last nine months. As we discussed in February, we got behind on our Navy programs and took several actions to catch up. In the fourth quarter of fiscal 2021, about a year ago, we started to reassign our commercial welders…

Thank you, Dan, and good morning, everyone. It's a pleasure to be speaking to you today as the new CFO of Graham. This is an exciting time for Graham and I look forward to meeting many of you in the future as we embark on this new strategy to build better companies to deliver a superior performance. Since joining the company in April, I spent most of my time leading the team, learning about the business and beginning to put processes in place that will improve information flow and accountability. I can tell you that I've been pleasantly surprised that many of these initiatives were already underway and gaining momentum. With that, let's review our results for the fourth quarter and full year as well as our outlook for fiscal 2023. On this slide, you can see our fourth quarter performance which shows modest sequential improvement. As Dan mentioned, our fourth quarter results were in line with our expectations. Sales were 39.7 million, up 55% over the last year's fourth quarter. Barber-Nichols contributed 15.9 million of this increase. And this along with strong commercial and aftermarket sales, helped to offset weaker sales from our legacy refining, chemical and petrochemical businesses. With the addition of Barber-Nichols, 47% of our sales during the quarter were to the defense industry as well as 6% or 2.2 million to the space industry. In the prior year fourth quarter, defense comprised only 26% of total sales and we had no revenue from the space industry. Our Batavia operations continue to be impacted during the quarter, but to a lesser degree than in the third quarter due to the higher costs relating to material and labor overruns for first article Navy project. Sequentially, gross margin improved 8.7 percentage points as we advance these projects, improve processes…

Thank you, Chris. We've been having a lot of fun working through Graham Corporation's strategy and rebranding, and this presentation is an overview of our efforts. Graham Corporation is now a corporate entity with two operating companies, Graham Manufacturing and Barber-Nichols, and we will be looking to add more operating companies as we go forward. We wrestled with different approaches to differentiate the corporate group from the operating entity with the same name. Ultimately, we decided that we weren't big enough to pull off a Facebook to Meta or Google to Alphabet rebrand. So we settled on a new logo and Web site refresh instead. I'm sure it's much more economical than a complete rebrand. Our Graham Corporation logo is our ticker symbol with red lines emanating from the G depicting energy, movement and flow. We are reenergized and ready to move, improve and grow. The fluid, power, heat transfer and vacuum products that we design and make involve flow. We know that gas and liquid flow can provide useful work, adapt to constraints and eventually overcome all obstacles. We liked the notion of continuous steady flow and motion, and built that into our logo. Our corporate mission is build better companies to deliver superior performance. And our new corporate Web site is www.grahamcorp.com. Please check it out. This next page shows our corporate vision and competitive advantage. There's a lot to unpack here, so let me walk you through it. Our vision includes several key concepts. First is build. Our passion is creating and improving something of value. Second is engineered product. We will never be stagnant if we continue to refresh and reinvent our product and ourselves. The third key concept here is team. As individual small businesses, we can improve faster with collaboration, leveraging best practices, and…

Thanks, Dan. This slide provides the culmination of what we've been talking about this morning. Graham is more diversified and now has a very solid defense industry base, which is complemented by our well established refining and petrochemical industry presence. Higher growth opportunities are also presenting themselves in advance energy, specifically hydrogen, and space markets. Similar to our guidance for fiscal '23, our five-year aspirational goals are purely based on our organic growth expectations. We believe we have the ability to reach 200 million, which represents an 8% to 10% CAGR for the top line. We expect this level of performance should allow for adjusted EBITDA margins to be in the low double digit to mid teens range as we leverage our operating platform, improve operational processes, and grow our higher margin businesses. This growth will be primarily defense-driven both at Barber-Nichols with expanding opportunities and at Batavia with its legacy Navy business. We view the commercial legacy business as a steady performer, augmented by an impressive push into higher margin aftermarket sales. Turning to the next slide. With the modest sequential improvement we saw in the fourth quarter of fiscal 2022, we believe we will continue to demonstrate that we are moving beyond our current challenges and have positioned our business for strong organic growth. We have initiatives that both of our businesses to organically grow, to new product development, increasing partnerships, and other growth initiatives. With that, we should again be showing that Graham has a business model that can generate attractive levels of cash. We are committed to utilizing that cash to first pay down debt. We feel that less than 2.5x leverage is an appropriate level for a company of our size. From an M&A standpoint, over time, we believe we can take our improving financial position and fund future acquisitions. Barber-Nichols is the blueprint that we believe we can duplicate given the dynamics of both of our platforms. It has not been forgotten that with the recent financial challenges, we had to suspend our dividends. We believe that as we get beyond the restrictions existing in our lending agreements, both dividends and potential share buybacks can again be topics of discussion at future Board meetings, but not until fiscal 2024. Let me now turn the call back to Dan to dive deeper into our strategy discussion.

Thank you, Chris. This graph gives you an overview of the various pieces of our business. The size of the bubble gives you an indication of the amount of revenue associated with each segment. We believe that each one of these businesses can grow in revenue if we apply the right strategy to each. The color of the bubble tells you if the segment is Barber-Nichols which is blue or Graham Manufacturing which is tan, but then I'll also point out that both operating units play in new energy. The position of each bubble gives you an idea of how we believe we are currently positioned relative to growth and differentiation and margin potential. Let's walk through each. New energy and space kind of up at the top left are both small businesses now, but they have good growth prospects. Margins are expected to be nominal as volume stays low for the time being. Both Barber-Nichols and Graham Navy businesses are expected to grow. While Graham has good differentiation now, the margins have been challenged with first article units. Barber-Nichols rebuild business is small now but could grow, and the Graham aftermarket is a very profitable business but probably doesn't grow significantly. Finally, the legacy Graham energy and petrochemical business is likely the slowest growing business. It gets more profitable with an energy upcycle and less profitable with more global competition. Next slide. Now we move to the Graham operating business overview. Graham has an engineering and fabrication facility in Batavia, New York, and offices in India and China that provide sales engineering and project oversight. Competitive advantage comes from technical people and processes. I note SMEs here. And SMEs means subject matter experts. Competitive advantage also comes from global reach and the installed base, excellent fabrication facilities and a…

Thank you, Dan. And I hope everyone appreciated all the information that we provided here. We will now start the Q&A session. So again, there are two ways that you can submit questions to us. One is through the Q&A button on the Web portal that you should see on your screen right there. The other is to dial into the number provided here 201-689-8560. An operator will then put you into the teleconference call and you can queue in by hitting Star 1 just like we do on normal conference calls. I do ask that if you do come in through the conference call line and you probably have the webinar showing still on your screen, mute your computer so that we don't get all of the feedback. While we're waiting, Dan and Chris, for those who get into the teleconference queue for live questions, let me just bring up the first question that we have from the webinar. And that is, so Dan, you came into Graham just last year and it's been quite a heavy lift it would appear. Tell us some of the puts and takes, what you liked, what you didn't like as it relates to this first year?

Yes. So the best pleasant surprise I think was just the welcome that I received. The genuine nature of people here in Western New York has been really nice. And I've been welcomed with open arms. The team is very open to change and really looking to improve and get better and better. And so that's been awesome. The other thing that I've really noticed is, I've stepped away from Barber-Nichols and I've been there for 30 years. And so to watch that crew just take off and really execute on their own without me I barely even check in, they are doing an amazing job there. So I think that we built a great team there. And Matt Malone's doing a great job of leading that group.

Excellent. Thanks, Dan. I see that we have Brett Kearney from Gabelli Funds in queue for a question on the telephone portal.

We do. Brett, please go ahead with your question.

Great. Thanks for taking my question. Thanks for [Technical Difficulty]

Donna [ph], did we lose him? All right, well, while we get Brett back in queue, let me take some of the questions off of the Web site. So let me start with a question for Chris. Our double digit EBITDA margin is likely to be achieved prior to fiscal year '27?

So as you can see from the guidance today, we're projecting 5% to 6% EBITDA margins for 2023. We would hope that you'd see gradual improvement year-after-year from there as we leverage our operating base and make some of these operational changes that Dan and I have been talking about today. So we think that obviously low double digit would be achievable before 2027. But then, we hope to get to the mid teens as we progress through that and make improvements.

Excellent. All right, and then Donna, maybe you can bring Brett back into queue.

Thank you. Sir, please go ahead with your questions.

Hi. Can you guys hear me?

Yes.

Yes. Sorry about that, Brett. Go ahead.

We lost him again.

We lost him again, Donna, and I'm not quite sure what's going on here. Donna, do you have a solution?

Brett, please go ahead again.

Yes. Okay, just one question. Nice uptick in organic growth investments. Curious on the R&D side if you could talk about like some of -- what you can disclose in terms of some of the attractive applications and verticals that you guys have identified, and then more broadly any changes you have made or plan to make process wise to the company's new product development approach?

Yes, so I can talk a little bit about both. So in Graham Manufacturing, we look at some new technology in vacuum systems that are much simpler than existing solutions today on the market. And so we'll be developing from scratch new vacuum technologies that we hope will enable us to basically grow our commercial side significantly from where it is today. Now, it is R&D. We may or may not actually be successful. But we're actually pretty excited to jump into some new product development at Graham. At Barber-Nichols, they kind of do R&D every day. And so we talked a little bit about nurturing the new energy programs. And so Barber-Nichols is working with some pretty advanced technology and systems with our customers in that space. Some of its solar, some of its nuclear, and so some pretty cool customer funded R&D that's going on there. But then Barber-Nichols is also looking at developing and really qualifying some of this disruptive pump technology for thermal management systems. And so they've got some R&D spend in that area also.

Great, that's very helpful. Thank you.

So let me take a couple more questions from the Web portal. I'm going to combine a couple regarding capital spending. Specifically, can you provide some insights on the project for fiscal year 2023? And then looking further out, what level of CapEx is required to grow revenue organically in line with our expectations?

Yes. So I'll take the first half of that and maybe leave the second to Chris. So capital spend this year we are looking at expanding our Navy facilities to enable a better use of our existing facilities. And so we'll spend some money there expanding some inspection areas so that we can get more fabrication area underneath Graham. On the Barber-Nichols side, they are looking to expand facilities to support the Mark 48 program. So they just landed the next block of Mark 48 in December and we announced that in a press release then. So the Navy is really looking to ramp up the production rate. And so we need a little bit more space there at Barber-Nichols to be able to do that. So those are a couple of examples of capital expenditures that we're doing this year. There's more, but I'll leave it at that. And then Chris, I think the question is what do we think that we'll have as far as capital expenditures in subsequent years?

Right. So our fiscal '23 guidance that we gave today shows CapEx at about 3% of revenue. So I would see us maintaining that just to support some of the growth initiatives that we have in place. So I would see anywhere from 3% to 5% over the next three to five years.

Donna, I think that [indiscernible].

Yes, hi. If I can ask a couple. You shipped your first condenser this quarter. How many condensers are there per sub? And how many more of these condensers do you have in your backlog?

So there's one for sub and we have [indiscernible] two and three in our backlog, yes.

Okay. And then another question on this. I assume that you won this bid a while ago. There was very little inflation when you originally bid for these condensers and your other projects that you have in your backlog? How do you and the Navy handle the labor and material inflationary costs on the balance of the condensers and on the other projects in your backlog?

Yes, it's great question, Gary [ph]. So when we bid these -- and this is both companies, when we bid these, these longer term contracts, we start with building in an assumed level of inflation. I can pretty much guarantee you that what we assumed when we bid some of these isn't keeping up with inflation today, where inflation is today. And so our customers are actually pretty understanding of what's going on. And even under firm fixed price contracts, they're allowing us to go back and propose additional costs associated with the inflation impact to material and labor. Now the big impact really is on the material side. We're seeing material in some cases up by 20%. It's kind of crazy in some very narrow windows, but generally our customers are very open to that. We're also in our bids we're letting people know that the bid validity is pretty short. And so the bids are only good for 30 days in some cases, and we reserve the right especially on the commercial side to come back and update that once we actually get under contract. So quite a few different things that we're doing to try to mitigate to that particular side. Chris, did I miss something or do you want to add anything to that?

No. Maybe not specific to the Navy contracts, but when we can, we do try to -- as soon as the bid is accepted in one, we lock in and we purchase our materials right away to lock in some of the future pricing. So a lot of that is already built in. We already have that on order, especially given the long lead times that we've been seeing as well.

Yes. Thank you. Great point.

Okay, very helpful. Thanks very much.

All right. I'll take the next question here from the Web. Do you view your primary space customers is coming from government or private space? And can you give us any color? Can you touch that at all?

So I would say that the majority are coming from private space. And can we put any color on who? No, we really can't. There is one company that we've actually put a video out with and that's Virgin Orbit, and you can see that on YouTube. But that's the only one that we can actually talk about.

Excellent. And then what about your return requirements for allocating capital for acquisitions?

Sure. So as Dan mentioned in his speaking points, we're a little bit away from starting to talk about acquisitions. It's definitely in the long-term strategic plan. But we have to focus right now on improving our profitability and our operational performance before we could start talking about acquisitions. So having spent a lot of time in that, that's really part of Dan and my strategic goals for this year is to start identifying targets and start thinking about that. But we would definitely be looking at double digit returns when we start that process.

Excellent. And then Donna, I see that Theo O’Neill has got mentioned [ph].

Mr. O’Neill, please go ahead. Theodore O’Neill: Okay, great. Can you hear me okay?

Yes. Theodore O’Neill: Great. Thanks. So Chris, in your prepared remarks, you said, if I got this correctly, that you thought that the impact of the issues in Batavia had a $10 million hit to gross profit margin. If I add that back, your gross profit margin for the year is still below where it's been the last couple of years. So the other things that were going on there, is that supply chain and COVID related?

Yes. So I'd say it's all the above. We estimated that impacted margins by 10 -- over 10 million is what we're projecting and what we estimated. Certainly increases in labor and in inflation on raw materials impacted our margins as well. But that will get built into the contracts as our backlog rolls off and new contracts -- we start working on new and more profitable contracts, especially as we get into the second and third and hopefully fourth and fifth article jobs as our Navy business backlog begins to build, which will have some of that pricing and inflation built in. Theodore O’Neill: Okay. And my other question is that of the 74% of the backlog in defense, you break that out as to how much of that's the naval business?

So all of its related to the Navy business and maybe not directly, it's through different first tier suppliers that we supply to. But in the end, it's all eventually going to go to the Navy.

So Barber-Nichols has contracts that are built into that backlog. They go to Tier 1 suppliers, then the Navy, but some go direct to the Navy. Graham's really go through Tier 1 primes and then to the Navy. Theodore O’Neill: Okay. Thanks very much.

And then obviously I'll remind you if you want to dial to ask questions, the number is there on the screen or you can enter a question to the Web portal. I have a question. The current capacity constraints and wide crack [ph] spreads, we're talking to the refining industry here, indicate future demand for Graham's products?

Gosh, I hope so. So as we talk to our customers, essentially the story that they're telling us and it's pretty uniform across most customers is that a lot of the companies were really holding on to capital spend and really trying to recover from the last several years. And so they were just kind of bank and profit and then providing some payout to the stockholders. When they were spending money, it tended to be a little bit more towards the new energy space, some of the alternative fuels and things like that. We have seen an uptick in the last six to nine months in the aftermarket business. And historically, that has been an indicator that people are fixing up their plants first, their existing facilities, and then they will consider a capital spend later. And our customers are actually echoing that in that they're saying, yes, we are spending money right now making sure that our plants are running well and up to capacity. And then we'll start to rework either revamps or retrofits and then new plants internationally are also on the books. So we do expect that the capital equipment business will come back, but we think that it's 12 months away before we start to see that.

Excellent. There appears to be no more questions. Dan, I'll turn it to you for any further remarks.

I just want to thank you all for your time today. We've been working on this hard. We've been really quiet and working to really understand our business and where we're making money and where we're not making money and then figuring out how to improve our businesses. And so we've had a great time figuring all that out. And we're just really happy to have the opportunity to present that to you. And personally, I look forward to talking to each of you individually in the future. Thank you very much.

Thank you.

Goodbye.