Graham Corporation Announces Fourth Quarter Fiscal Year 2012 Orders of $42.3 Million; 2012 Revs $103.2M vs $106.9M Est; Q4 $20.3M vs $23.9M Est
Graham Corporation (NYSE: GHM) announced today that it had total orders of $42.3 million in the fourth quarter of its fiscal year which ended March 31, 2012, referred to as fiscal 2012. Included were two orders for oil refining projects in China that totaled $5.5 million.
Total orders for the year were $106.7 million. Orders in fiscal 2012 for Energy Steel, the Company's wholly-owned subsidiary that focuses solely on the nuclear power market, were $31.8 million.
Fiscal Year 2012 Revenue and Gross Margin Outlook Reduced; Net Income Impacted by R&D Tax Credit Adjustment
Based on preliminary unaudited results for the fourth quarter, fiscal year 2012 revenue is expected to be approximately $103.2 million, or approximately $20.3 million for the fourth quarter. The revenue shortfall compared with previous guidance of $105 million to $108 million primarily reflects an extension of the fabrication and delivery schedule for the multi-year naval nuclear propulsion program order. As a result of lower than expected revenue, the Company has adjusted its fiscal 2012 gross margin guidance from a range of 32% to 33% to an unaudited 31.6%.
Mr. James R. Lines, Graham's President and Chief Executive Officer, commented, “The new outlook for fiscal year 2012 is based on a revised project schedule for the Navy order and doesn't impact our backlog or optimism as we enter fiscal 2013. Additionally, we are pleased with our success in China and the two orders for oil refining projects. I believe that we are still in the early stages of the recovery and the tenor of opportunities in our pipeline has definitely strengthened. Although orders in any one quarter can prove to be lumpy.”
The Company also recorded a $433 thousand after-tax charge in its fourth quarter fiscal 2012 related to the adjustment of research and development tax credit claims generated during the tax years ended March 1999 through 2008. The aggregate research and development tax credit adjustment, agreed to following an IRS audit finalized in the fourth quarter of 2012, totaled $859 thousand after tax, which includes interest. Of such amount, the Company had previously recorded $426 thousand. The remaining $433 thousand, or $0.04 per diluted share, negatively impacts net income in the fourth quarter. The tax credit adjustment, excluding interest, represents approximately 40% of the $1,871 thousand in credits claimed in the subject tax years.
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