Graham Corporation (GHM): Business Model Canvas [11-2024 Updated]
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Graham Corporation (GHM) Bundle
In today's rapidly evolving industrial landscape, understanding the business model of Graham Corporation (GHM) reveals how this company remains a key player in the turbomachinery and pump manufacturing sectors. With a strong focus on high-efficiency energy solutions and sustainability, GHM's strategic partnerships and innovative practices position it well within the defense, aerospace, and renewable energy markets. Discover the essential components of GHM's business model canvas below, illustrating how they create value and maintain competitive advantages in their industry.
Graham Corporation (GHM) - Business Model: Key Partnerships
Collaborations with defense contractors
Graham Corporation has established significant partnerships with various defense contractors, enhancing its foothold in the defense sector. As of September 30, 2024, approximately 83% of the company’s total backlog was attributed to defense-related contracts, amounting to $327,438 thousand. Key defense programs include contracts for the U.S. Navy, such as the MK19 Air Turbine Pump for the Columbia-class submarine, signifying a strategic alignment with major defense initiatives.
Strategic alliances in the aerospace sector
In the aerospace sector, Graham Corporation has formed strategic alliances that bolster its technological capabilities and market reach. The acquisition of P3 Technologies in November 2023 for $11,238 thousand has been pivotal, as it expands Graham’s offerings in turbomachinery solutions for aerospace applications. This acquisition is expected to enhance synergies and allow for the integration of P3's advanced technologies into Graham's product lines. Revenue contributions from P3 for the first six months of fiscal 2025 were approximately $2,437 thousand.
Partnerships for clean energy technology development
Graham Corporation is actively involved in partnerships aimed at advancing clean energy technologies. The company has received a $2,100 grant from the BlueForge Alliance to support its defense welder training programs, which aligns with its initiatives to enhance clean energy capabilities. Additionally, Graham has been involved in projects such as the development of surface condenser systems for a net-zero carbon emissions integrated ethylene cracker project, further emphasizing its commitment to sustainable energy solutions.
| Partnership Type | Key Partners | Financial Impact | Notable Projects |
|---|---|---|---|
| Defense Contractors | U.S. Navy, Major Defense Firms | Backlog: $327,438 thousand | MK19 Air Turbine Pump, Columbia-class submarine |
| Aerospace | P3 Technologies | Acquisition Cost: $11,238 thousand | Turbomachinery Solutions |
| Clean Energy | BlueForge Alliance | Grant: $2,100 thousand | Net-zero Carbon Project |
Graham Corporation (GHM) - Business Model: Key Activities
Manufacturing turbomachinery and pumps
Graham Corporation specializes in the manufacturing of turbomachinery and pumps, primarily serving the defense, refining, and chemical/petrochemical markets. For the second quarter of fiscal 2025, net sales reached $53,563, a 19% increase from $45,076 in the same quarter of the previous year. This growth was significantly driven by a $5,779 increase in sales to the defense industry, attributed to new programs and growth in existing projects.
Providing engineering and technical support
The company offers comprehensive engineering and technical support to ensure optimal performance of its products. This includes design assistance, installation guidance, and ongoing maintenance support. The second quarter of fiscal 2025 saw a gross profit of $12,799, reflecting improved execution and better pricing strategies.
Research and development for innovative products
Research and development (R&D) is a critical component of Graham Corporation's strategy, focusing on innovative solutions to enhance product offerings. In the second quarter of fiscal 2025, R&D expenses increased by $176 compared to the previous year, contributing to a total SG&A expense of $9,160 for the quarter.
| Key Activity | Details | Financial Impact (Q2 FY25) |
|---|---|---|
| Manufacturing turbomachinery and pumps | Focus on defense, refining, and chemical markets | Net sales: $53,563 (up 19% YoY) |
| Engineering and technical support | Design assistance, installation, and maintenance | Gross profit: $12,799 |
| Research and Development | Investment in innovative product development | R&D expenses: Increased by $176 |
Graham Corporation (GHM) - Business Model: Key Resources
Advanced manufacturing facilities
Graham Corporation operates advanced manufacturing facilities primarily located in Batavia, New York, which support its production of critical equipment for various industries, including defense, refining, and chemical processing. The company has invested significantly in its facilities to enhance production capabilities and efficiency. As of September 30, 2024, the net carrying amount of property, plant, and equipment was approximately $36,602,000 .
Capital expenditures for the first six months of fiscal 2025 were reported at $6,464,000, reflecting investments in machinery, equipment, and facility improvements . The company has increased its expected capital expenditures for fiscal 2025 to a range of $13,000,000 to $18,000,000, driven by expansion projects including a cryogenic propellant testing facility .
Skilled workforce with engineering expertise
Graham Corporation boasts a skilled workforce that is essential for maintaining its competitive edge in the manufacturing sector. The company emphasizes engineering expertise, particularly for its defense contracts, which represent a significant portion of its business. As of September 30, 2024, personnel costs increased by approximately $469,000 compared to the previous year, indicating investment in talent to support growth .
The company has also entered into a Performance Bonus Agreement linked to the performance objectives for its employees, which can range between $2,000 and $4,000 annually . This is part of a broader strategy to incentivize and retain skilled workers, crucial for the ongoing development of advanced manufacturing capabilities.
Intellectual property portfolio, including patents
Graham Corporation maintains a robust intellectual property portfolio, which includes patents and other intangible assets critical for its operations. As of September 30, 2024, the company reported net carrying amounts for its intangible assets as follows:
| Intangible Asset | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount |
|---|---|---|---|
| Customer Relationships | $16,200,000 | $2,471,000 | $13,729,000 |
| Technology and Technical Know-how | $12,600,000 | $1,912,000 | $10,688,000 |
| Backlog | $3,900,000 | $3,789,000 | $111,000 |
| Tradename | $300,000 | $92,000 | $208,000 |
| Total Intangible Assets | $33,000,000 | $8,264,000 | $24,736,000 |
The company’s ongoing investment in research and development, reflected by an increase of approximately $176,000 in R&D expenses, further strengthens its intellectual property position . This portfolio supports Graham's ability to deliver innovative solutions and maintain compliance with industry standards, especially in the defense sector where technology and intellectual property are paramount.
Graham Corporation (GHM) - Business Model: Value Propositions
High-efficiency energy solutions
Graham Corporation specializes in high-efficiency energy solutions, particularly through its product offerings in the refining and petrochemical sectors. For the second quarter of fiscal 2025, net sales in the refining market reached $8,416, representing a 15% increase compared to the previous year, driven by larger capital projects and increased sales in emerging markets like India. The company has emphasized the development of energy-efficient systems that optimize performance and reduce operational costs for their clients.
Specialized products for defense and aerospace industries
In the defense and aerospace sectors, Graham Corporation has established a strong foothold, contributing significantly to its revenue. In the second quarter of fiscal 2025, sales to the defense industry alone amounted to $30,897, marking a 23% increase year-over-year. Notably, Graham has secured contracts for advanced products such as cryogenic pumps for space launch vehicles and pumps for the U.S. Navy's Columbia-class submarine. This focus on specialized products not only meets the stringent requirements of these industries but also positions Graham as a key player in defense-related supply chains.
Commitment to sustainability and reduced carbon footprint
Graham Corporation is committed to sustainability, reflected in its initiatives towards reducing the carbon footprint of its operations. The company has received contracts for projects like the world’s first net-zero carbon emissions integrated ethylene cracker and derivatives site. Additionally, as of September 30, 2024, the total backlog of the company reached $407,009, with a significant portion attributed to sustainability-driven projects. This commitment not only aligns with global sustainability trends but also enhances the company's competitive edge in securing future contracts.
| Market | Net Sales (Q2 FY2025) | Year-Over-Year Change |
|---|---|---|
| Refining | $8,416 | 15% |
| Chemical/Petrochemical | $5,422 | 24% |
| Defense | $30,897 | 23% |
| Space | $3,416 | 23% |
| Total Net Sales | $53,563 | 19% |
Graham Corporation continues to leverage its value propositions by focusing on high-efficiency solutions, specialized products for defense and aerospace, and a strong commitment to sustainability, thus ensuring it remains competitive in various markets while addressing critical customer needs.
Graham Corporation (GHM) - Business Model: Customer Relationships
Long-term contracts with defense and aerospace clients
Graham Corporation has established long-term contracts primarily with defense and aerospace clients, which constitute a significant portion of its revenue. As of September 30, 2024, the defense sector accounted for approximately 80% of the total backlog, amounting to $327,438 thousand . The company's strategic focus on this sector has been reinforced by recent contracts, including the provision of cryogenic pumps for space launch vehicles and the MK19 Air Turbine Pump for the U.S. Navy's Columbia-class submarine . This long-term approach not only stabilizes revenue streams but also fosters deeper relationships with key government and military clients, facilitating ongoing collaboration and trust.
Custom solutions tailored to client needs
Graham Corporation specializes in delivering custom solutions tailored to the specific needs of its clients. This is particularly evident in its defense contracts, where the company adapts its offerings to meet stringent military specifications and operational requirements. For instance, the company reported a 28% increase in sales to the defense industry for the first six months of fiscal 2025, reflecting its ability to innovate and provide bespoke solutions . The focus on customization has resulted in significant growth in backlog from the chemical/petrochemical sector, which saw a 58% increase year-over-year, highlighting the effectiveness of Graham's tailored approach .
Ongoing technical support and training
Graham Corporation emphasizes ongoing technical support and training as a core component of its customer relationships. The company has invested in training programs, particularly in defense welding, supported by a grant from the BlueForge Alliance, which has provided $2,100 in funding . This commitment to training not only enhances the skills of its workforce but also ensures that clients receive expert guidance on the use and maintenance of Graham's products. The company's ongoing technical support helps in maintaining high customer satisfaction and loyalty, further solidifying its position in the competitive market.
| Aspect | Details |
|---|---|
| Defense Backlog | $327,438 thousand (80% of total backlog) |
| Sales Increase in Defense Industry | 28% increase for the first six months of fiscal 2025 |
| Grant Funding for Training | $2,100 from BlueForge Alliance |
| Custom Solutions Revenue Growth in Chemical/Petrochemical | 58% increase year-over-year |
Graham Corporation (GHM) - Business Model: Channels
Direct sales to large industrial clients
Graham Corporation primarily engages in direct sales to large industrial clients, particularly in the defense, refining, and petrochemical sectors. For the second quarter of fiscal 2025, net sales were $53,563,000, representing a 19% increase from $45,076,000 in the same period of the previous year. A significant portion of this sales increase came from the defense industry, which saw a 23% rise, contributing $5,779,000 to the overall sales growth.
Online platforms for product information
Graham Corporation utilizes online platforms to provide detailed product information to potential clients. This includes specifications, capabilities, and application areas for their products, which are critical for informed purchasing decisions. The company also leverages its website to facilitate inquiries and lead generation, enhancing customer engagement. As of September 2024, the company reported a total backlog of $407,009,000, indicating strong demand that is partially driven by their online presence.
Trade shows and industry conferences for networking
Participation in trade shows and industry conferences is a key channel for Graham Corporation to network and connect with potential clients. These events allow the company to showcase its technologies and innovations, particularly in the defense and aerospace sectors. In fiscal 2025, Graham anticipates recognizing revenue on approximately 35% to 45% of its backlog within one year, which indicates a robust pipeline of opportunities cultivated through these networking channels.
| Channel Type | Description | Financial Impact |
|---|---|---|
| Direct Sales | Sales to large industrial clients in defense, refining, and petrochemical sectors. | Net sales of $53,563,000 in Q2 FY2025; 19% increase YoY. |
| Online Platforms | Providing product information and facilitating inquiries via the website. | Total backlog of $407,009,000 as of September 2024. |
| Trade Shows | Network and showcase technologies at industry conferences. | Expected 35%-45% of backlog revenue recognized within one year. |
Graham Corporation (GHM) - Business Model: Customer Segments
Defense sector clients, including U.S. Navy
Graham Corporation primarily serves the defense sector, with a significant focus on the U.S. Navy. As of September 30, 2024, defense-related sales accounted for 58% of total net sales, amounting to $30,897 for the quarter, up from $25,118 in the same quarter of the previous year. Over the first six months of fiscal 2025, net sales to the defense industry increased by $12,056, or 28%, compared to the same period in fiscal 2024, driven by new programs and improved pricing. The backlog for defense orders stood at $327,438, representing 80% of total backlog as of September 30, 2024.
Aerospace companies involved in space exploration
The aerospace sector, particularly companies engaged in space exploration, is a growing customer segment for Graham Corporation. The company reported net sales of $3,416 to this sector for the second quarter of fiscal 2025, a notable increase from $2,775 the previous year. Additionally, the backlog for space-related orders reached $18,180, which is a substantial increase of 150% year-over-year. This growth is attributed to contracts for cryogenic pumps and other components necessary for space launch vehicles.
Industries focusing on renewable energy solutions
Graham Corporation is also targeting industries focused on renewable energy solutions. The company has recently secured contracts for systems that support the world’s first net-zero carbon emissions integrated ethylene cracker and derivatives site located in North America. In the first six months of fiscal 2025, revenue from the chemical/petrochemical sector, which includes renewable energy applications, was $10,205. The backlog for chemical/petrochemical projects also saw a significant increase, reflecting a strong demand for sustainable solutions, with a value of $21,633.
| Customer Segment | Net Sales (Q2 FY2025) | Year-over-Year Change | Backlog (as of Sep 30, 2024) | Percentage of Total Backlog |
|---|---|---|---|---|
| Defense Sector (U.S. Navy) | $30,897 | 23% | $327,438 | 80% |
| Aerospace (Space Exploration) | $3,416 | 23% | $18,180 | 4% |
| Renewable Energy Solutions | $10,205 | Decrease in Aftermarket Sales | $21,633 | 5% |
Graham Corporation (GHM) - Business Model: Cost Structure
Manufacturing and operational costs
Graham Corporation's manufacturing and operational costs for the first six months of fiscal 2025 amounted to approximately $78,347,000, reflecting a significant increase compared to $66,477,000 for the same period in fiscal 2024. This increase is attributed to higher production volumes and costs associated with the acquisition of P3 Technologies, LLC.
| Cost Category | FY 2025 (6 months) | FY 2024 (6 months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Manufacturing Costs | $78,347,000 | $66,477,000 | $11,870,000 | 17.9% |
Research and development expenditures
Research and development (R&D) expenditures for Graham Corporation totaled $1,454,000 for the six months ended September 30, 2024, up from $924,000 in the same period of the prior fiscal year. This increase reflects the company's commitment to enhancing its engineering and product development capabilities, particularly in defense and advanced manufacturing technologies.
| Expenditure Category | FY 2025 (6 months) | FY 2024 (6 months) | Change ($) | Change (%) |
|---|---|---|---|---|
| R&D Expenditures | $1,454,000 | $924,000 | $530,000 | 57.3% |
Selling, general and administrative expenses
Selling, general, and administrative (SG&A) expenses for Graham Corporation were reported at $18,434,000 for the first six months of fiscal 2025, compared to $13,681,000 for the same period in fiscal 2024. This increase of $4,753,000, or approximately 34.7%, is driven by investments in employee compensation, professional fees, and integration costs associated with the P3 acquisition.
| Expense Category | FY 2025 (6 months) | FY 2024 (6 months) | Change ($) | Change (%) |
|---|---|---|---|---|
| SG&A Expenses | $18,434,000 | $13,681,000 | $4,753,000 | 34.7% |
Graham Corporation (GHM) - Business Model: Revenue Streams
Sales of turbomachinery and pumps
In the second quarter of fiscal 2025, Graham Corporation reported net sales of $53,563,000, a 19% increase from $45,076,000 in the same period of fiscal 2024. The sales growth included a significant contribution from turbomachinery and pumps, particularly within the defense and aerospace sectors.
Sales to the defense industry alone rose by $5,779,000, or 23%, attributed to new programs and growth in existing contracts. For the first six months of fiscal 2025, net sales totaled $103,514,000 compared to $92,645,000 in the prior year, reflecting strong performance across various markets.
| Market | Q2 FY25 Sales ($000) | Q2 FY24 Sales ($000) | Change (%) |
|---|---|---|---|
| Defense | 30,897 | 25,118 | 23% |
| Refining | 8,416 | 7,289 | 15% |
| Chemical/Petrochemical | 5,422 | 4,365 | 24% |
| Space | 3,416 | 2,775 | 23% |
| Other | 5,412 | 5,529 | -2% |
Long-term contracts with defense and aerospace sectors
Graham Corporation has established long-term contracts, particularly with the defense and aerospace sectors, which significantly contribute to its revenue streams. As of September 30, 2024, the total backlog was reported at $407,009,000, with 80% of this backlog attributed to the defense market.
Orders booked in the second quarter of fiscal 2025 reached $63,678,000, reflecting a strong demand for specialized products, including cryogenic pumps for space launch vehicles and turbine pumps for the U.S. Navy's Columbia-class submarine. This trend indicates a robust pipeline for future revenue generation.
| Backlog by Market ($000) | Percentage of Total Backlog | |
|---|---|---|
| Defense | 327,438 | 80% |
| Refining | 30,653 | 8% |
| Chemical/Petrochemical | 21,633 | 5% |
| Space | 18,180 | 4% |
| Other | 9,105 | 2% |
Service and maintenance agreements for installed systems
Graham Corporation also generates revenue through service and maintenance agreements for its installed systems. Aftermarket sales for the refining, chemical/petrochemical, and defense markets totaled approximately $17,610,000 for the first six months of fiscal 2025, although this was $4,553,000 lower than the record levels of the prior year.
These service agreements ensure a steady stream of revenue, as they typically involve ongoing maintenance and support for critical systems, which are essential for operational efficiency in high-stakes environments like defense and aerospace.
| Aftermarket Sales ($000) | Q2 FY25 | Q2 FY24 | Change ($000) |
|---|---|---|---|
| Refining | 9,800 | 11,300 | -1,500 |
| Chemical/Petrochemical | 4,500 | 5,200 | -700 |
| Defense | 3,310 | 3,700 | -390 |
Updated on 16 Nov 2024
Resources:
- Graham Corporation (GHM) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of Graham Corporation (GHM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Graham Corporation (GHM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.