Financial Analysis

Note 2 - Acquisitions FlackTek On January 23, 2026, the Company acquired FlackTek, a provider of advanced mixing and material processing solutions. FlackTek's systems are sold to OEMs, research and development centers, defense laboratories, and industrial manufacturers serving adhesives, sealants, functional coatings, composites, electronics, and other advanced materials markets. FlackTek adds a product portfolio with a shared customer base and an installed footprint that extends across the full value chain, from upstream to downstream production and quality control. Its mixing systems are process-critical and market-agnostic, serving defense, energetics, oil & gas, food, battery, aerospace and space, medical, and other industrial applications where precision, repeatability, and consistency drive value. This transaction was accounted for as a business combination which requires that assets acquired and liabilities assumed be recognized at their fair value as of the acquisition date. The purchase price of $ 37,022 was comprised of 76 shares of the Company's common stock, representing a value of $ 5,678 at a price of $ 74.89 per share, and cash consideration of $ 26,456 , subject to certain potential adjustments, including a customary working capital adjustment. The cash consideration was funded through borrowings on the Company's line of credit. The purchase agreement included a contingent earn-out to earn up to an additional $ 25,000 in future performance-based cash earno …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 17 Commitments and Contingencies: The Company has been named as a defendant in lawsuits alleging personal injury from exposure to asbestos allegedly contained in, or accompanying, products made by the Company or from exposure to asbestos at the Company's facilities. The Company is a co-defendant with numerous other defendants in these lawsuits and intends to vigorously defend itself against these claims. The claims in the Companys current lawsuits are similar to those made in previous asbestos-related suits that named the Company as a defendant, which either were dismissed when it was shown that the Company had not supplied products to the plaintiffs places of work or were settled for immaterial amounts. The Company believes that the resolution of these asbestos-related lawsuits will not have a material adverse effect on the Company's financial position or results of operations. However, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these asbestos-related lawsuits could have a material adverse impact on the Company's financial position and the results of operations. During the third quarter of fiscal 2024, the Audit Committee of the Board of Directors, with the assistance of external counsel and forensic professionals, concluded an investigation into a whistleblower complaint received regarding its wholly-owned subsidiary GIPL. The investigation identified evidence supporting the complaint and other m …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Note 9 - Debt: On October 13, 2023, the Company entered into a new five-year revolving credit facility with Wells Fargo Bank, National Association (""Wells Fargo"") that provides a $ 50,000 line of credit (the ""Revolving Credit Facility""). Simultaneous with the close of the acquisition of FlackTek on January 23, 2026, the Company amended the Revolving Credit Facility to increase the limit to $ 80,000 , modify the definition of Consolidated Funded Indebtedness to limit the amount of contingent earn-out liability included to the amount expected to be paid in the next twelve months, as well as permit the incurrence or existe nce of indebtedness of GIPL arising from any letters of credit, bank guarantees, or other similar obligations in a principal amount not to exceed $ 5,000 , and certain other administrative amendments. The Revolving Credit Facility has a $ 25,000 sub-limit for letters of credit. As of March 31, 2026 , there was $ 13,000 borrowed and $ 6,111 letters of credit outstanding on the Revolving Credit Facility. The Revolving Credit Facility contains customary terms and conditions, including representations and warranties and affirmative and negative covenants, as well as financial covenants for the benefit of Wells Fargo, which require the Company to maintain (i) a consolidated total leverage ratio not to exceed 3.50 : 1.00 and (ii) a consolidated fixed charge coverage ratio of at least 1.20 : 1.00 , in both cases computed in accordance with the definitions and re …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables present the Company's net sales disaggregated by market and geographic area: Year ended March 31, Market 2026 2025 2024 Defense $ 147,445 $ 121,925 $ 99,493 Energy & Process 83,343 73,287 72,758 Space 14,505 14,684 13,282 Net sales $ 245,293 $ 209,896 $ 185,533 Year ended March 31, Geographic Area 2026 2025 2024 Asia $ 12,630 $ 16,884 $ 15,144 Canada 11,217 7,586 4,229 Middle East 7,003 7,088 2,568 South America 1,251 1,165 733 U.S. 209,628 169,943 155,908 All other 3,564 7,230 6,951 Net sales $ 245,293 $ 209,896 $ 185,533 The following table presents the Company's revenue percentages disaggregated by revenue recognized over time or upon shipment: Year ended March 31, 2026 2025 2024 Revenue recognized over time 82 % 80 % 77 % Revenue recognized at shipment 18 % 20 % 23 %

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"Note 13 - Stock Compensation Plans: The 2020 Graham Corporation Equity Incentive Plan, as amended (the ""2020 Plan"") provides for the issuance of 722 shares of common stock in connection with grants of incentive stock options, non-qualified stock options, restricted stock units and stock awards to officers, key employees and outside directors, including 112 shares that became available under the 2020 Plan from the Company's prior plan, the Amended and Restated 2000 Graham Corporation Incentive Plan to increase Shareholder Value (the ""2000 Plan""). As of August 11, 2020, the effective date of the 2020 Plan, no further awards will be granted under the 2000 Plan. There were 286 shares available for future grants pursuant to the 2020 Plan at March 31, 2026. The following grants of restricted stock units (""RSUs"") and performance stock units (""PSUs"") were awarded: Vest 100 % on First Vest One-Third Per Year Vest 100 % on Third Anniversary (1) Over Three-Year Term (1) Anniversary (1) Officers and Officers and Total Shares Year Ended March 31, Directors Key Employees Key Employees Awarded 2026 Time Vesting RSUs 11 26 37 Performance Vesting PSUs 42 42 2025 Time Vesting RSUs 18 30 8 56 Performance Vesting PSUs 62 62 2024 Time Vesting RSUs 38 40 78 Performance Vesting PSUs 79 79 (1) Subject to the terms of the applicable award. Stock-based compensation cost and the related tax benefits were as follows: Stock-Based Related Year Ended March 31, Compensation Cost Tax Benefits 2026 $ …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 6 Intangible Assets: Intangible assets are comprised of the following: Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount At March 31, 2026 Intangibles subject to amortization: Customer relationships 8 - 20 years $ 19,600 $ 4,228 $ 15,372 Technology and technical know-how 9 - 20 years 26,550 3,318 23,232 Tradename 3 years 300 242 58 $ 46,450 $ 7,788 $ 38,662 Intangibles not subject to amortization: Goodwill Indefinite $ 38,078 $ $ 38,078 Tradename Indefinite 13,400 13,400 $ 51,478 $ $ 51,478 Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount At March 31, 2025 Intangibles subject to amortization: Customer relationships 8 - 20 years $ 16,200 $ 3,041 $ 13,159 Technology and technical know-how 10 - 20 years 12,600 2,290 10,310 Backlog 4 years 3,900 3,900 Tradename 3 years 300 142 158 $ 33,000 $ 9,373 $ 23,627 Intangibles not subject to amortization: Goodwill Indefinite $ 25,520 $ $ 25,520 Tradename Indefinite 6,700 6,700 $ 32,220 $ $ 32,220 A portion of Technology and technical know-how, tradenames, and Customer relationships are amortized in Selling, general and administrative expense on a straight line basis over each of their estimated useful lives. Backlog and a portion of technology and technical know-how are amortized in Cost of products sold over the projected conversion period based on management estimates at time of purchase. Intangible asset amortization was $ …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Note 11 Income Taxes: An analysis of the components of income before provision for income taxes is presented below: Year ended March 31, 2026 2025 2024 United States $ 15,038 $ 14,381 $ 5,077 Asia ( 278 ) 1,026 497 Income before provision for income taxes $ 14,760 $ 15,407 $ 5,574 The provision for income taxes consists of: Year ended March 31, 2026 2025 2024 Current: Federal $ 170 $ 1,387 $ 1,133 State 154 37 100 Foreign 8 282 257 332 1,706 1,490 Deferred: Federal 2,030 5,429 ( 419 ) State ( 16 ) 210 88 Foreign ( 124 ) 25 ( 106 ) Changes in valuation allowance 38 ( 4,193 ) ( 35 ) 1,928 1,471 ( 472 ) Total provision for income taxes $ 2,260 $ 3,177 $ 1,018 Below is a tabular rate reconciliation pursuant to the disclosure requirements of ASU 2023-09, adopted prospectively for the year ended March 31, 2026: Year ended March 31, 2026 Amount Percent Provision for income taxes as U.S. federal statutory rate $ 3,100 21.0 % State and local income taxes, net of federal income tax effect 139 0.9 % Foreign tax effects ( 60 ) ( 0.4 )% Nontaxable or nondeductible items 162(m) 604 4.1 % Share based compensation ( 667 ) ( 4.5 )% Other ( 31 ) ( 0.2 )% Effect of cross-border tax laws ( 30 ) ( 0.2 )% Tax credits R&D tax credit ( 790 ) ( 5.4 )% Other ( 5 ) Effective tax rate $ 2,260 15.3 % The reconciliation of the provision calculated using the U.S. federal tax rate with the provision for income taxes presented in the consolidated financial statements is as follows: Year ended March 31, 2 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Accounting and reporting changes In the normal course of business, management evaluates all new Accounting Standards Updates (""ASU"") and other accounting pronouncements issued by the Financial Accounting Standards Board (""FASB""), Securities and Exchange Commission, or other authoritative accounting bodies to determine the potential impact they may have on the Companys Consolidated Financial Statements. Other than those discussed below, management does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on the Companys Consolidated Financial Statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. The ASU requires disclosure of disaggregated income taxes paid in both U.S. and foreign jurisdictions, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024. The Company adopted the guidance effective for fiscal year ended March 31, 2026 on a prospective basis. The adoption of the guidance did not have a material impact on the consolidated financial statements. For additional information, refer to Note 11, Income Taxes. In November 2024, the FASB issued ASU No. 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures …

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"Note 12 Employee Benefit Plans: Retirement Plans The Company has a qualified defined benefit plan covering Batavia based employees hired prior to January 1, 2003, which is non-contributory. Benefits are based on the employee's years of service and average earnings for the five highest consecutive calendar years of compensation in the ten-year period preceding retirement . The Company's funding policy for the plan is to contribute the amount required by the Employee Retirement Income Security Act of 1974, as amended. The components of pension cost are: Year ended March 31, 2026 2025 2024 Service cost during the period $ 253 $ 252 $ 252 Interest cost on projected benefit obligation 1,295 1,292 1,312 Expected return on assets ( 1,688 ) ( 1,778 ) ( 1,851 ) Amortization of: Actuarial loss 851 781 843 Net pension cost $ 711 $ 547 $ 556 The components of net pension cost other than the service cost component are included in Other expense, net in the Consolidated Statements of Operations. The weighted average actuarial assumptions used to determine net pension cost are: Year ended March 31, 2026 2025 2024 Discount rate 5.53 % 5.27 % 5.03 % Rate of increase in compensation levels 3.00 % 3.00 % 3.00 % Long-term rate of return on plan assets 5.75 % 5.75 % 5.75 % The expected long-term rate of return is based on the mix of investments that comprise plan assets and external forecasts of future long-term investment returns, historical returns, correlations and market volatilities. The Com …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Note 3 Revenue Recognition: The Company recognizes revenue on all contracts when control of the product is transferred to the customer. Control is generally transferred when products are shipped, title is transferred, significant risks of ownership have transferred, the Company has rights to payment, and rewards of ownership pass to the customer. The following tables present the Company's net sales disaggregated by market and geographic area: Year ended March 31, Market 2026 2025 2024 Defense $ 147,445 $ 121,925 $ 99,493 Energy & Process 83,343 73,287 72,758 Space 14,505 14,684 13,282 Net sales $ 245,293 $ 209,896 $ 185,533 Year ended March 31, Geographic Area 2026 2025 2024 Asia $ 12,630 $ 16,884 $ 15,144 Canada 11,217 7,586 4,229 Middle East 7,003 7,088 2,568 South America 1,251 1,165 733 U.S. 209,628 169,943 155,908 All other 3,564 7,230 6,951 Net sales $ 245,293 $ 209,896 $ 185,533 The final destination of products shipped is the basis used to determine net sales by geographic area. No sales were made to the terrorist sponsoring nations of Cuba, Iran, North Korea or Syria in the fiscal years presented above. A performance obligation represents a promise in a contract to provide a distinct good or service to a customer. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Tra …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"Note 15 - Segment Information: The Company has one reporting segment as its operating segments meet the requirements for aggregation. The Company and its operating subsidiaries design and manufacture mission critical fluid, power, heat transfer, vacuum and advanced mixing technologies for the Defense, Energy & Process, and Space industries. The Company also services and sells spare parts for its equipment. The Company's chief operating decision maker (""CODM"") has been identified as its Chief Executive Officer who evaluates performance on an operating segment bases, as well as a consolidated basis, based on Adjusted EBITDA, which is a non-GAAP measure. This measure is used by our CODM, management, our Board of Directors, investors, lenders and other external users of our financial statements to assess our operating performance and to compare operating performance to other companies in our industry. In addition, our CODM believes Adjusted EBITDA is a useful measure to assess the earnings power of the business without the impact of capital structure and can be used to assess our ability to fund future capital expenditures in the business. The following table provides our results as a reconciliation from consolidated Net income to our consolidated Adjusted EBITDA: Years Ended March 31, 2026 2025 2024 Net income $ 12,500 $ 12,230 $ 4,556 Acquisition & integration expense (income), net 1,305 ( 1,170 ) 432 Equity-based compensation 2,131 1,957 1,279 ERP implementation cos …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Note 18 - Subsequent Events: On April 14, 2026, the Company entered into a Securities Purchase Agreement with certain accounts advised by T. Rowe Price Investment Management, Inc. pursua nt to which the Company agreed to sell an aggregate of 600 shares of common stock, par value of $ 0.10 per share for $ 83.36 per share, based upon the 20-day average closing price of the Company's common stock on the New York Stock Exchange on April 13, 2026, for an aggregate gross proceeds of $ 50,000 . The Company utilized $ 13,000 of the proceeds for debt repayment and is expected to utilize the remaining proceeds to help fund future investment in organic and inorganic growth opportunities.

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