Graham Corporation (NYSE:GHM) Q3 2023 Earnings Call Transcript

Bill Baldwin: As far as, I guess important positions, how are you staffed up regarding your technical engineers to focus on your petrochemical and refinery aftermarket business as you go after greater penetration of the installed base on the repair and maintenance side of the business? Are you staffed up there the way you want to be to pursue that business as aggressively as you’d like to?

Dan Thoren: No. We still have open positions in Batavia for engineering. We believe that we need more to be able to handle additional volume that may be coming in the future. As Chris had mentioned, people are still tough to come by. Unemployment is still relatively low. And so, just individual positions within our companies are a little bit tough to fill, you know still even after we’ve come out of COVID and that will work. So

Bill Baldwin: How about the personnel in your regional offices down the calling maybe more directly on the customer? How are you staffed out there right now?

Dan Thoren: Staffed pretty well €“ we still have one more opening that we’re trying to fill within the Houston office, but doing fairly well there.

Bill Baldwin: Okay. And I know it’s probably a little early to talk about your strategic focus on fiscal 2024, but at this stage, are you in a position to, kind of outline from a high level what your, let’s say, key focus or key performance focus will be for the company in 2024? I’m not so much financially as I am, I guess, just strategically as far as Key initiatives, I guess, is what I’m talking about, key initiatives?

Dan Thoren: Yes. So, certainly from a strategic plan perspective, you don’t want it to completely changed direction from year-to-year. So, I would suspect that it will be a very, very well aligned with the strategic plan we laid out, yes, last year. We’re tweaking it at this point. We’re modeling the budgets, looking at our markets, understanding where the revenue is coming from, etcetera. But we haven’t completed that process and gotten approval from our Board yet for that. So, we’re still in the process, but I would suspect that it will be very much along the lines of, we have €“ we have stabilized Graham Batavia pretty well. You’ll continue to see improvement initiatives there to get better and better. And then on the Barber-Nichols side, we talked about, kind of the four major areas of work that Barber-Nichols is pursuing and that hasn’t changed.

So, at a high level, it will be tweaks on last year’s strategic plan to take what we learned this year and improve ourselves even more.

Bill Baldwin: Just two more quick items if I could, Dan and Chris. On the Batavia manufacturing, are you still using some outside contract labor to get your work done or are you pretty much converted that now to your internal production staff?

Dan Thoren: Take that one, Chris.

Chris Thome: Sure. Yes. So, the contract welders that we held to get back on schedule, those have €“ all those contractors have left and have been dismissed. We do from time-to-time to fill in where €“ for the gaps in production, we do subcontract out some of our commercial work. So, we do still have that going on, but the contract welders that we had on-site have gone home.

Bill Baldwin: Okay. And secondly, I just wonder if you could do a little bit more of a deep dive into the nature of your space business, as far as maybe not so much to customers who I assume are probably confidential, but the types of products that are being included in the space business. What’s the nature of the products there? The key product?