Graham Corporation (NYSE:GHM) Q2 2024 Earnings Call Transcript

Dan Thoren: Yes. So we’ve already started that. So we have placed long lead equipment on order that means CNC machining equipment as well as automated welders. We’re looking at facility expansion, and we’ve started the planning process around facility expansion also. So we think that we’re still 1.5 years to 2 years away from having a facility that’s up and in production that enables us to accelerate the production. Certainly, our current facilities can continue to push through at the rate that we already are committed to. But this additional investment really allows for acceleration and getting product through faster to support the accelerated shipbuilding schedule.

Dick Ryan : Okay. And the defense — yes, I think you had a release not too long ago about Barber-Nichols getting some hydrogen business. what’s going on on their side of the ledger? Is any of that defense orders or the defense orders that came in the 110. Is any of that for BN? Or is that all Batavia?

Dan Thoren: The majority of it was Batavia, but BN continues to get their share of big defense orders. The hydrogen economy is pretty interesting. There’s a lot going on right now. I think you probably saw the announcements from the federal government that they had funded 7 hydrogen hubs around the country. That’s basically trying to put the the infrastructure in place to enable use of hydrogen 4, mostly for mobility. So for transportation-related things. So that’s pretty exciting. We obviously continue to work with several different customers in helping them put together the pieces of the hydrogen infrastructure. And so both companies are pretty involved in all of that. Too early to say, I would say, at this point in time, but kind of exciting things happening. Slower probably than anybody want as most new efforts are, but we see steady progress in the hydrogen economy.

Operator: Our next question comes from the line of Gary Schwab with Valley Forge Capital Management.

Gary Schwab: Going back to that press release on October 19 about Universal hydrogen. I have — that wasn’t actually a hydrogen product. That was an antifreeze pump you were making. Could you explain a little bit more about that?

Dan Thoren: Yes. In that particular case, you’re exactly right, Gary. It was a water glycol pump that was used for cooling on that aircraft. But in addition to that — that technology demonstrator, we’re involved in other hydrogen transferring pumps in different applications that you’ll be able to see here in the future, but I can’t talk about those quite yet.

Gary Schwab: Okay. And then, again, going back to the Universal Hydrogen. I took a look at them. They’re an interesting company. And they make hydrogen modules that have to be filled with liquid hydrogen at their — at the source at their base whether they produce that hydrogen and that has to go into the modules. Is Barber-Nichols doing anything with that part because that’s where their cryogenic systems work?

Dan Thoren: Right. So I guess I could say in very broad terms that a lot of the industrial gas companies are very interested in the hydrogen economy. They’re looking at that area as another market to sell their product. And each one of those companies is looking at their involvement in these hydrogen hubs where the liquid hydrogen can be produced from and then distributed from. And so Barber-Nichols in its cryogenic pump capability is working with several different folks in that area. But again, we’re under NDA and can’t talk too much about that.

Gary Schwab: Okay. Just one last small one. On the — on the LD Micro conference, Matt Malone happened to talk about you guys developing some kind of critical rotating machinery for small modular nuclear units that would fill up the size of a small tractor trailer. Can you talk about that at all?