{"url_path":"/sec/ghm/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-08","source_url":"https://www.sec.gov/Archives/edgar/data/716314/0001193125-26-260688-index.html","accession_number":"0001193125-26-260688","cik":"0000716314","ticker":"GHM","issuer_name":"GRAHAM CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/716314/0001193125-26-260688-index.html","primary_entity_key":"0000716314","primary_entity_name":"GRAHAM CORP"},"word_count":15541,"has_tables":true,"body_markdown":"Item 8. Financial Statements and Supplementary Data\n\nINDEX TO FINANCIAL STATEMENTS\n\n \n\nConsolidated Financial Statements:\n\nPage\n\n \n\n[Report of Independent Registered Public Accounting Firm (PCAOB ID 00034)](#report_of_independent_firm)\n\n40\n\n \n\n[Consolidated Statements of Operations for the years ended March 31, 2026, 2025 and 2024](#consolidated_statements_operations)\n\n43\n\n \n\n[Consolidated Statements of Comprehensive Income for the years ended March 31, 2026, 2025 and 2024](#consolidated_statements_comprehensive_in)\n\n44\n\n \n\n[Consolidated Balance Sheets as of March 31, 2026 and 2025](#consolidated_balance_sheets)\n\n45\n\n \n\n[Consolidated Statements of Cash Flows for the years ended March 31, 2026, 2025 and 2024](#consolidated_statements_cash_flows)\n\n46\n\n \n\n[Consolidated Statements of Changes in Stockholders' Equity for the years ended March 31, 2026, 2025 and 2024](#consolidated_statements_changes_in_stock)\n\n47\n\n \n\n[Notes to Consolidated Financial Statements](#notes_to_consolidated_financial_statemen)\n\n48\n\n39\n\n \n\n \n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\nTo the stockholders and the Board of Directors of Graham Corporation\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of Graham Corporation and subsidiaries (the \"Company\") as of March 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows, for each of the three years in the period ended March 31, 2026, and the related notes and the financial statement schedule entitled \"Schedule II - Valuation and Qualifying Accounts\" listed in the Index at Item 15 (collectively referred to as the \"financial statements\"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2026, in conformity with accounting principles generally accepted in the United States of America.\n\nWe have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 8, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.\n\nBasis for Opinion\n\nThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matters\n\nThe critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\n\nRevenue Recognition -- Over time -- Input Method - Refer to Notes 1 and 3 to the financial statements\n\nCritical Audit Matter Description\n\nThe Company recognizes revenue over time when contract performance results in the creation of a product for which the Company does not have an alternative use and the contract includes an enforceable right to payment in an amount that corresponds directly with the value of the performance completed. To measure progress towards completion on performance obligations for which revenue is recognized over time the Company primarily utilizes an input method based upon a ratio of direct labor hours incurred to date to management’s estimate of the total direct labor hours to be incurred at completion on each contract or an input method based upon a ratio of direct costs incurred to date to management’s estimate of total costs to be incurred at the completion of each contract.\n\nWe identified a portion of revenue associated with select in-process contracts as of March 31, 2026, recognized over time utilizing an input method and that exhibit characteristics of audit interest, as a critical audit matter because of the judgments necessary for management to estimate total direct labor hours or total costs, at completion for such select contracts. An extensive audit effort and a\n\n40\n\n \n\nhigh degree of auditor judgment was required when performing audit procedures to audit management’s estimates of total direct labor hours or total costs at completion used to recognize revenue over time and evaluating the results of those procedures.\n\nHow the Critical Audit Matter Was Addressed in the Audit\n\nOur audit procedures related to management’s estimate of total direct labor hours or total costs, at completion, for in-process contracts recognized over time included the following, among others:\n\n•\nWe tested the effectiveness of controls over management’s estimate of total direct labor hours or total costs, at completion for in-process contracts recognized over time.\n\n•\nWe performed a risk assessment over the contract population which included analyzing the population using various characteristics of audit interest.\n\n•\nWe tested the mathematical accuracy of management’s calculation of revenue recognized over time for a selection of contracts.\n\n▪\nFor a selection of in-process contracts with customers that were recognized over time utilizing an input method, we performed the following procedures, among others:\n\no\nWe evaluated whether the contracts were properly included in management’s calculation of revenue recognized over time based on the terms and conditions of each contract.\n\no\nWe evaluated the reasonableness and consistency of the methodology used by management to estimate total direct labor hours or total costs at completion for each contract and tested the mathematical accuracy of such estimate.\n\no\nWe evaluated the direct labor hours or total costs estimate by obtaining original estimates and any change orders, testing direct labor hours or total costs completed to date, evaluating whether the costs were properly included in the labor hours or total costs to date subject to allocation to contracts, and comparing the accuracy of actual labor hours or costs to what was estimated.\n\no\nWe tested the completeness of the direct labor hours or total costs by observing the work sites and inspecting the progress to completion as of fiscal year end, and performing corroborating inquiries with the Company's project managers and engineers regarding the estimates of total direct labor hours or total costs at completion.\n\n•\nWe evaluated management’s ability to estimate total direct labor hours or total costs at completion accurately by comparing actual direct labor hours or costs incurred to management’s historical estimates for a selection of similar contracts that were completed during the year ended March 31, 2026.\n\n \n\nAcquisition Accounting -- Refer to Notes 1 and 2 to the financial statements\n\nCritical Audit Matter Description\n\nOn January 23, 2026, the Company completed its acquisition of FlackTek Manufacturing, LLC and FlackTek Sales, LLC (collectively, \"FlackTek\"). This transaction was accounted for as a business combination which requires that the purchase price be allocated to the assets acquired and liabilities assumed based on their respective estimated fair values as of the acquisition date. The fair values of acquisition-related intangible assets includes customer relationships of $3.4 million, developed technology of $13.3 million, and trade name of $6.7 million. The valuation of the customer relationships and developed technology intangible assets were determined using the multi period excess earnings method, a form of the income approach. The valuation of the trade name intangible asset was determined using the relief from royalty method, which is also a form of the income approach. The fair value determination of the customer relationships, developed technology and trade name intangible assets required management to make various estimates and assumptions related to the selection of the discount rate to be used.\n\nGiven the fair value determination of the customer relationships, developed technology and trade name intangible assets requires management to make various estimates and assumptions related to the selection of the discount rate, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions within the selection of the discount rate to be used required a high degree of auditor judgment and increased extent of effort, including the need to involve our fair value specialists.\n\nHow the Critical Audit Matter Was Addressed in the Audit\n\nOur audit procedures related to the selection of the discount rate used by management to determine the fair value of the customer relationships, developed technology and trade name intangible assets included the following, among others:\n\n41\n\n \n\n▪\nWe tested the effectiveness of controls over the valuation of the customer relationships, developed technology and trade name intangible assets, including management's controls over selection of the discount rate.\n\n▪\nWith the assistance of fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by:\n\no\nTesting the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.\n\no\nDeveloping a range of independent estimates and comparing those to the discount rate selected by management.\n\n/s/Deloitte & Touche LLP\n\nRochester, New York\n\nJune 8, 2026\n\n \n\nWe have served as the Company's auditor since 1993.\n\n42\n\n \n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\n(Dollar amounts in thousands, except per share data)\n\n \n\n \n\n \n\nYears Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n \n\n \n\n \n\nNet sales\n\n \n\n$\n\n245,293\n\n \n\n \n\n$\n\n209,896\n\n \n\n \n\n$\n\n185,533\n\n \n\nCost of products sold\n\n \n\n \n\n187,543\n\n \n\n \n\n \n\n157,035\n\n \n\n \n\n \n\n144,948\n\n \n\nGross profit\n\n \n\n \n\n57,750\n\n \n\n \n\n \n\n52,861\n\n \n\n \n\n \n\n40,585\n\n \n\nOperating expenses and income:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nSelling, general and administrative\n\n \n\n \n\n41,562\n\n \n\n \n\n \n\n37,143\n\n \n\n \n\n \n\n32,217\n\n \n\nSelling, general and administrative - amortization\n\n \n\n \n\n1,792\n\n \n\n \n\n \n\n1,745\n\n \n\n \n\n \n\n1,366\n\n \n\nOther operating (income) expense, net\n\n \n\n \n\n(621\n\n)\n\n \n\n \n\n(1,215\n\n)\n\n \n\n \n\n80\n\n \n\nOperating income\n\n \n\n \n\n15,017\n\n \n\n \n\n \n\n15,188\n\n \n\n \n\n \n\n6,922\n\n \n\nOther expenses and income:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLoss on extinguishment of debt\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n726\n\n \n\nOther expense, net\n\n \n\n \n\n514\n\n \n\n \n\n \n\n364\n\n \n\n \n\n \n\n374\n\n \n\nInterest (income) expense, net\n\n \n\n \n\n(257\n\n)\n\n \n\n \n\n(583\n\n)\n\n \n\n \n\n248\n\n \n\nTotal other expenses (income)\n\n \n\n \n\n257\n\n \n\n \n\n \n\n(219\n\n)\n\n \n\n \n\n1,348\n\n \n\nIncome before provision for income taxes\n\n \n\n \n\n14,760\n\n \n\n \n\n \n\n15,407\n\n \n\n \n\n \n\n5,574\n\n \n\nProvision for income taxes\n\n \n\n \n\n2,260\n\n \n\n \n\n \n\n3,177\n\n \n\n \n\n \n\n1,018\n\n \n\nNet Income\n\n \n\n$\n\n12,500\n\n \n\n \n\n$\n\n12,230\n\n \n\n \n\n$\n\n4,556\n\n \n\nPer share data:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBasic:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n$\n\n1.14\n\n \n\n \n\n$\n\n1.12\n\n \n\n \n\n$\n\n0.42\n\n \n\nDiluted:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n$\n\n1.12\n\n \n\n \n\n$\n\n1.11\n\n \n\n \n\n$\n\n0.42\n\n \n\nAverage common shares outstanding:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBasic\n\n \n\n \n\n10,988\n\n \n\n \n\n \n\n10,884\n\n \n\n \n\n \n\n10,743\n\n \n\nDiluted\n\n \n\n \n\n11,138\n\n \n\n \n\n \n\n11,066\n\n \n\n \n\n \n\n10,844\n\n \n\n \n\nSee Notes to Consolidated Financial Statements.\n\n \n\n43\n\n \n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(Dollar amounts in thousands)\n\n \n\n \n\nYears Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n$\n\n12,500\n\n \n\n \n\n$\n\n12,230\n\n \n\n \n\n$\n\n4,556\n\n \n\nOther comprehensive income:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nForeign currency translation adjustment\n\n \n\n \n\n51\n\n \n\n \n\n \n\n(79\n\n)\n\n \n\n \n\n(244\n\n)\n\nDefined benefit pension and other postretirement plans, net of income tax\n   provision of $308, $29, and $194, for the years ended\n  March 31, 2026, 2025 and 2024, respectively\n\n \n\n \n\n1,087\n\n \n\n \n\n \n\n105\n\n \n\n \n\n \n\n694\n\n \n\nTotal other comprehensive income\n\n \n\n \n\n1,138\n\n \n\n \n\n \n\n26\n\n \n\n \n\n \n\n450\n\n \n\nTotal comprehensive income\n\n \n\n$\n\n13,638\n\n \n\n \n\n$\n\n12,256\n\n \n\n \n\n$\n\n5,006\n\n \n\n \n\nSee Notes to Consolidated Financial Statements.\n\n \n\n44\n\n \n\nCONSOLIDATED BALANCE SHEETS\n\n(Dollar amounts in thousands, except per share data)\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\n \n\n \n\nAssets\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents\n\n \n\n$\n\n6,580\n\n \n\n \n\n$\n\n21,577\n\n \n\nTrade accounts receivable, net of allowances ($195 and $630 at March 31, 2026\n      and 2025, respectively)\n\n \n\n \n\n33,809\n\n \n\n \n\n \n\n35,507\n\n \n\nUnbilled revenue\n\n \n\n \n\n59,868\n\n \n\n \n\n \n\n38,494\n\n \n\nInventories\n\n \n\n \n\n50,758\n\n \n\n \n\n \n\n40,025\n\n \n\nPrepaid expenses and other current assets\n\n \n\n \n\n4,255\n\n \n\n \n\n \n\n4,249\n\n \n\nIncome taxes receivable\n\n \n\n \n\n1,184\n\n \n\n \n\n \n\n1,520\n\n \n\nTotal current assets\n\n \n\n \n\n156,454\n\n \n\n \n\n \n\n141,372\n\n \n\nProperty, plant and equipment, net\n\n \n\n \n\n60,330\n\n \n\n \n\n \n\n50,649\n\n \n\nPrepaid pension asset\n\n \n\n \n\n6,633\n\n \n\n \n\n \n\n5,950\n\n \n\nOperating lease assets\n\n \n\n \n\n6,740\n\n \n\n \n\n \n\n6,386\n\n \n\nGoodwill\n\n \n\n \n\n38,078\n\n \n\n \n\n \n\n25,520\n\n \n\nCustomer relationships, net\n\n \n\n \n\n15,372\n\n \n\n \n\n \n\n13,159\n\n \n\nTechnology and technical know-how, net\n\n \n\n \n\n23,232\n\n \n\n \n\n \n\n10,310\n\n \n\nOther intangible assets, net\n\n \n\n \n\n13,458\n\n \n\n \n\n \n\n6,858\n\n \n\nDeferred income tax asset\n\n \n\n \n\n131\n\n \n\n \n\n \n\n1,502\n\n \n\nOther assets\n\n \n\n \n\n3,188\n\n \n\n \n\n \n\n2,404\n\n \n\nTotal assets\n\n \n\n$\n\n323,616\n\n \n\n \n\n$\n\n264,110\n\n \n\nLiabilities and stockholders’ equity\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent portion of finance lease obligations\n\n \n\n$\n\n23\n\n \n\n \n\n$\n\n21\n\n \n\nAccounts payable\n\n \n\n \n\n25,740\n\n \n\n \n\n \n\n27,309\n\n \n\nAccrued compensation\n\n \n\n \n\n21,547\n\n \n\n \n\n \n\n19,161\n\n \n\nAccrued expenses and other current liabilities\n\n \n\n \n\n4,728\n\n \n\n \n\n \n\n4,322\n\n \n\nCustomer deposits\n\n \n\n \n\n102,421\n\n \n\n \n\n \n\n84,062\n\n \n\nOperating lease liabilities\n\n \n\n \n\n1,806\n\n \n\n \n\n \n\n1,275\n\n \n\nIncome taxes payable\n\n \n\n \n\n5\n\n \n\n \n\n \n\n—\n\n \n\nTotal current liabilities\n\n \n\n \n\n156,270\n\n \n\n \n\n \n\n136,150\n\n \n\nLong-term debt\n\n \n\n \n\n13,000\n\n \n\n \n\n \n\n—\n\n \n\nFinance lease obligations\n\n \n\n \n\n21\n\n \n\n \n\n \n\n44\n\n \n\nOperating lease liabilities\n\n \n\n \n\n5,343\n\n \n\n \n\n \n\n5,514\n\n \n\nDeferred income tax liability\n\n \n\n \n\n897\n\n \n\n \n\n \n\n24\n\n \n\nAccrued pension and postretirement benefit liabilities\n\n \n\n \n\n1,145\n\n \n\n \n\n \n\n1,192\n\n \n\nOther long-term liabilities\n\n \n\n \n\n6,625\n\n \n\n \n\n \n\n1,609\n\n \n\nTotal liabilities\n\n \n\n \n\n183,301\n\n \n\n \n\n \n\n144,533\n\n \n\nCommitments and contingencies (Notes 8 and 17)\n\n \n\n \n\n \n\n \n\n \n\n \n\nStockholders’ equity:\n\n \n\n \n\n \n\n \n\n \n\n \n\nPreferred stock, $1.00 par value, 500 shares authorized\n\n \n\n \n\n \n\n \n\n \n\n \n\nCommon stock, $0.10 par value, 25,500 shares authorized; 11,247 and 11,077 shares\n   issued and 11,073 and 10,903 shares outstanding at March 31, 2026 and 2025,\n   respectively\n\n \n\n \n\n1,124\n\n \n\n \n\n \n\n1,107\n\n \n\nCapital in excess of par value\n\n \n\n \n\n41,699\n\n \n\n \n\n \n\n34,616\n\n \n\nRetained earnings\n\n \n\n \n\n106,729\n\n \n\n \n\n \n\n94,229\n\n \n\nAccumulated other comprehensive loss\n\n \n\n \n\n(5,849\n\n)\n\n \n\n \n\n(6,987\n\n)\n\nTreasury stock (174 at March 31, 2026 and 2025, respectively)\n\n \n\n \n\n(3,388\n\n)\n\n \n\n \n\n(3,388\n\n)\n\nTotal stockholders’ equity\n\n \n\n \n\n140,315\n\n \n\n \n\n \n\n119,577\n\n \n\nTotal liabilities and stockholders’ equity\n\n \n\n$\n\n323,616\n\n \n\n \n\n$\n\n264,110\n\n \n\nSee Notes to Consolidated Financial Statements.\n\n45\n\n \n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(Dollar amounts in thousands)\n\n \n\n \n\nYears Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n \n\n \n\n \n\nOperating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n$\n\n12,500\n\n \n\n \n\n$\n\n12,230\n\n \n\n \n\n$\n\n4,556\n\n \n\nAdjustments to reconcile net income to net cash provided by\n   operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDepreciation\n\n \n\n \n\n5,337\n\n \n\n \n\n \n\n3,718\n\n \n\n \n\n \n\n3,275\n\n \n\nAmortization\n\n \n\n \n\n2,506\n\n \n\n \n\n \n\n2,218\n\n \n\n \n\n \n\n2,157\n\n \n\nAdjustments for credit losses\n\n \n\n \n\n(256\n\n)\n\n \n\n \n\n829\n\n \n\n \n\n \n\n95\n\n \n\nAmortization of unrecognized prior service cost and actuarial losses\n\n \n\n \n\n840\n\n \n\n \n\n \n\n781\n\n \n\n \n\n \n\n843\n\n \n\nAmortization of debt issuance costs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n131\n\n \n\nEquity-based compensation expense\n\n \n\n \n\n2,131\n\n \n\n \n\n \n\n1,957\n\n \n\n \n\n \n\n1,279\n\n \n\nGain on disposal or sale of property, plant and equipment\n\n \n\n \n\n(52\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(5\n\n)\n\nChange in fair value of contingent consideration\n\n \n\n \n\n(568\n\n)\n\n \n\n \n\n(1,215\n\n)\n\n \n\n \n\n80\n\n \n\nLoss on extinguishment of debt\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n726\n\n \n\nDeferred income taxes\n\n \n\n \n\n1,928\n\n \n\n \n\n \n\n1,471\n\n \n\n \n\n \n\n(472\n\n)\n\n(Increase) decrease in operating assets, net of acquisitions:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts receivable\n\n \n\n \n\n5,930\n\n \n\n \n\n \n\n7,999\n\n \n\n \n\n \n\n(20,724\n\n)\n\nUnbilled revenue\n\n \n\n \n\n(21,387\n\n)\n\n \n\n \n\n(10,595\n\n)\n\n \n\n \n\n11,855\n\n \n\nInventories\n\n \n\n \n\n(6,785\n\n)\n\n \n\n \n\n(6,627\n\n)\n\n \n\n \n\n(6,220\n\n)\n\nIncome taxes receivable\n\n \n\n \n\n326\n\n \n\n \n\n \n\n(2,235\n\n)\n\n \n\n \n\n998\n\n \n\nPrepaid expenses and other current and non-current assets\n\n \n\n \n\n(121\n\n)\n\n \n\n \n\n(2,190\n\n)\n\n \n\n \n\n(2,199\n\n)\n\nOperating lease assets\n\n \n\n \n\n1,435\n\n \n\n \n\n \n\n1,294\n\n \n\n \n\n \n\n1,212\n\n \n\nPrepaid pension asset\n\n \n\n \n\n(115\n\n)\n\n \n\n \n\n(234\n\n)\n\n \n\n \n\n(287\n\n)\n\nIncrease (decrease) in operating liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable\n\n \n\n \n\n(794\n\n)\n\n \n\n \n\n3,491\n\n \n\n \n\n \n\n401\n\n \n\nAccrued compensation, accrued expenses and other current and\n   non-current liabilities\n\n \n\n \n\n(1,849\n\n)\n\n \n\n \n\n639\n\n \n\n \n\n \n\n6,011\n\n \n\nCustomer deposits\n\n \n\n \n\n16,418\n\n \n\n \n\n \n\n12,090\n\n \n\n \n\n \n\n25,572\n\n \n\nOperating lease liabilities\n\n \n\n \n\n(1,428\n\n)\n\n \n\n \n\n(1,272\n\n)\n\n \n\n \n\n(1,119\n\n)\n\nLong-term portion of accrued compensation, accrued pension\n   liability and accrued postretirement benefits\n\n \n\n \n\n(63\n\n)\n\n \n\n \n\n(33\n\n)\n\n \n\n \n\n(45\n\n)\n\nNet cash provided by operating activities\n\n \n\n \n\n15,933\n\n \n\n \n\n \n\n24,316\n\n \n\n \n\n \n\n28,120\n\n \n\nInvesting activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPurchase of property, plant and equipment\n\n \n\n \n\n(16,054\n\n)\n\n \n\n \n\n(18,957\n\n)\n\n \n\n \n\n(9,226\n\n)\n\nProceeds from disposal of property, plant and equipment\n\n \n\n \n\n274\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n44\n\n \n\nAcquisitions, net of cash acquired\n\n \n\n \n\n(27,285\n\n)\n\n \n\n \n\n(170\n\n)\n\n \n\n \n\n(6,812\n\n)\n\nNet cash used by investing activities\n\n \n\n \n\n(43,065\n\n)\n\n \n\n \n\n(19,127\n\n)\n\n \n\n \n\n(15,994\n\n)\n\nFinancing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBorrowings of debt obligations\n\n \n\n \n\n33,000\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n13,000\n\n \n\nPrincipal repayments on debt\n\n \n\n \n\n(20,000\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(25,500\n\n)\n\nRepayments on finance lease obligations\n\n \n\n \n\n(335\n\n)\n\n \n\n \n\n(320\n\n)\n\n \n\n \n\n(316\n\n)\n\nPayment of debt exit costs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(752\n\n)\n\nPayment of debt issuance costs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(241\n\n)\n\nIssuance of common stock\n\n \n\n \n\n832\n\n \n\n \n\n \n\n653\n\n \n\n \n\n \n\n476\n\n \n\nTax withholdings related to net share settlements of restricted stock units and awards\n\n \n\n \n\n(1,541\n\n)\n\n \n\n \n\n(854\n\n)\n\n \n\n \n\n(58\n\n)\n\nNet cash provided (used) by financing activities\n\n \n\n \n\n11,956\n\n \n\n \n\n \n\n(521\n\n)\n\n \n\n \n\n(13,391\n\n)\n\nEffect of exchange rate changes on cash\n\n \n\n \n\n179\n\n \n\n \n\n \n\n(30\n\n)\n\n \n\n \n\n(53\n\n)\n\nNet (decrease) increase in cash and cash equivalents\n\n \n\n \n\n(14,997\n\n)\n\n \n\n \n\n4,638\n\n \n\n \n\n \n\n(1,318\n\n)\n\nCash and cash equivalents at beginning of year\n\n \n\n \n\n21,577\n\n \n\n \n\n \n\n16,939\n\n \n\n \n\n \n\n18,257\n\n \n\nCash and cash equivalents at end of year\n\n \n\n$\n\n6,580\n\n \n\n \n\n$\n\n21,577\n\n \n\n \n\n$\n\n16,939\n\n \n\n \n\nSee Notes to Consolidated Financial Statements.\n\n46\n\n \n\nCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY\n\nYears Ended March 31, 2026, 2025 and 2024\n\n(Dollar and share amounts in thousands)\n\n \n\n \n\n \n\nCommon Stock\n\n \n\n \n\nCapital in\n\n \n\n \n\n \n\n \n\n \n\nAccumulated\nOther\n\n \n\n \n\n \n\n \n\n \n\nTotal\n\n \n\n \n\n \n\n \n\n \n\n \n\nPar\n\n \n\n \n\nExcess of\n\n \n\n \n\nRetained\n\n \n\n \n\nComprehensive\n\n \n\n \n\nTreasury\n\n \n\n \n\nStockholders'\n\n \n\n \n\n \n\nShares\n\n \n\n \n\nValue\n\n \n\n \n\nPar Value\n\n \n\n \n\nEarnings\n\n \n\n \n\nLoss\n\n \n\n \n\nStock\n\n \n\n \n\nEquity\n\n \n\nBalance at March 31, 2023\n\n \n\n \n\n10,774\n\n \n\n \n\n$\n\n1,075\n\n \n\n \n\n$\n\n28,061\n\n \n\n \n\n$\n\n77,443\n\n \n\n \n\n$\n\n(7,463\n\n)\n\n \n\n$\n\n(2,183\n\n)\n\n \n\n$\n\n96,933\n\n \n\nComprehensive income\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n4,556\n\n \n\n \n\n \n\n450\n\n \n\n \n\n \n\n \n\n \n\n \n\n5,006\n\n \n\nIssuance of shares\n\n \n\n \n\n229\n\n \n\n \n\n \n\n25\n\n \n\n \n\n \n\n2,674\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n(293\n\n)\n\n \n\n \n\n2,406\n\n \n\nForfeiture of shares\n\n \n\n \n\n(10\n\n)\n\n \n\n \n\n(1\n\n)\n\n \n\n \n\n1\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n—\n\n \n\nRecognition of equity-based compensation expense\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n1,279\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n1,279\n\n \n\nPurchase of treasury stock\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n(58\n\n)\n\n \n\n \n\n(58\n\n)\n\nBalance at March 31, 2024\n\n \n\n \n\n10,993\n\n \n\n \n\n \n\n1,099\n\n \n\n \n\n \n\n32,015\n\n \n\n \n\n \n\n81,999\n\n \n\n \n\n \n\n(7,013\n\n)\n\n \n\n \n\n(2,534\n\n)\n\n \n\n \n\n105,566\n\n \n\nComprehensive income\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n12,230\n\n \n\n \n\n \n\n26\n\n \n\n \n\n \n\n \n\n \n\n \n\n12,256\n\n \n\nIssuance of shares\n\n \n\n \n\n84\n\n \n\n \n\n \n\n8\n\n \n\n \n\n \n\n644\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n(854\n\n)\n\n \n\n \n\n(202\n\n)\n\nRecognition of equity-based compensation expense\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n1,957\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n1,957\n\n \n\nBalance at March 31, 2025\n\n \n\n \n\n11,077\n\n \n\n \n\n \n\n1,107\n\n \n\n \n\n \n\n34,616\n\n \n\n \n\n \n\n94,229\n\n \n\n \n\n \n\n(6,987\n\n)\n\n \n\n \n\n(3,388\n\n)\n\n \n\n \n\n119,577\n\n \n\nComprehensive income\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n12,500\n\n \n\n \n\n \n\n1,138\n\n \n\n \n\n \n\n \n\n \n\n \n\n13,638\n\n \n\nIssuance of shares\n\n \n\n \n\n170\n\n \n\n \n\n \n\n17\n\n \n\n \n\n \n\n4,952\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n4,969\n\n \n\nRecognition of equity-based compensation expense\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n2,131\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n2,131\n\n \n\nBalance at March 31, 2026\n\n \n\n \n\n11,247\n\n \n\n \n\n$\n\n1,124\n\n \n\n \n\n$\n\n41,699\n\n \n\n \n\n$\n\n106,729\n\n \n\n \n\n$\n\n(5,849\n\n)\n\n \n\n$\n\n(3,388\n\n)\n\n \n\n$\n\n140,315\n\n \n\n \n\nSee Notes to Consolidated Financial Statements.\n\n \n\n47\n\n \n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nYears Ended March 31, 2026, 2025 and 2024\n\n(Amounts in thousands, except per share data)\n\n \n\n \n\nNote 1 - The Company and Its Accounting Policies:\n\nGraham Corporation, and its operating subsidiaries, (together, the \"Company\"), is a global leader in the design and manufacture of mission critical fluid, power, heat transfer, vacuum and advanced mixing technologies for the Defense, Energy & Process, and Space industries. The Company acquired P3 Technologies, LLC (\"P3\") on November 9, 2023, Xdot Bearing Technologies (\"Xdot\") on October 20, 2025, and FlackTek Manufacturing, LLC and FlackTek Sales, LLC (collectively, \"FlackTek\") on January 23, 2026. The accompanying Consolidated Financial Statements include each acquisition from the date of purchase. The Company's significant accounting policies are set forth below.\n\nThe Company's fiscal years ended March 31, 2026, 2025 and 2024 are referred to as \"fiscal 2026,\" \"fiscal 2025\" and \"fiscal 2024,\" respectively.\n\nPrinciples of consolidation and use of estimates in the preparation of consolidated financial statements\n\nThe consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Barber-Nichols, LLC (\"BN\"), located in Arvada, CO, P3, located in Jupiter, FL, FlackTek Manufacturing, LLC, located in Louisville, CO, FlackTek Sales, LLC, located in Greenville, SC, Graham Vacuum and Heat Transfer Technology (Suzhou) Co., Ltd., located in China, and Graham India Private Limited (\"GIPL\"), located in India. All intercompany balances, transactions and profits are eliminated in consolidation.\n\nThe preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (\"GAAP\") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the related revenues and expenses during the reporting period. Actual amounts could differ from those estimated.\n\nTranslation of foreign currencies\n\nAssets and liabilities of the Company's foreign subsidiaries are translated into U.S. dollars at currency exchange rates in effect at year end and revenues and expenses are translated at average exchange rates in effect for the year. Gains and losses resulting from foreign currency transactions are included in results of operations. The Company's sales and purchases in foreign currencies are not material to the overall consolidated financial statements. Therefore, foreign currency transaction gains and losses have not historically impacted the Company's financial results materially. Gains and losses resulting from translation of the foreign subsidiaries balance sheets are included in a separate component of stockholders' equity. Translation adjustments are not adjusted for income taxes since they relate to an investment, which is permanent in nature.\n\nRevenue recognition\n\nThe Company accounts for revenue in accordance with Accounting Standard Codification 606, \"Revenue from Contracts with Customers\" (\"ASC 606\").\n\nThe 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. Customer acceptance may also be a factor in determining whether control of the product has transferred. Although revenue on the majority of the Company’s contracts, as measured by number of contracts, is recognized upon shipment to the customer, revenue on larger contracts, which are fewer in number but generally represent the majority of revenue, is recognized over time as these contracts meet specific criteria in ASC 606.\n\nUnbilled revenue (contract assets) in the Consolidated Balance Sheets represents revenue recognized that has not been billed to customers on contracts in which revenue is recognized over time. All progress payments exceeding unbilled revenue are presented as customer deposits (contract liabilities) in the Consolidated Balance Sheets.\n\nCash and cash equivalents\n\nCash and cash equivalents consist of cash and highly liquid, short-term investments with maturities at the time of purchase of three months or less.\n\n48\n\n \n\nTrade Accounts receivable, net of allowances\n\nTrade accounts receivable are recorded at the invoiced amount and do not bear interest. The provision for credit losses is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional provisions in the future.\n\nShipping and handling fees and costs\n\nShipping and handling fees billed to the customer are recorded in Net sales and the related costs incurred for shipping and handling are included in Cost of products sold.\n\nInventories\n\nInventories are stated at the lower of cost or net realizable value, using the average cost method.\n\nProperty, plant, equipment and depreciation\n\nProperty, plant and equipment are stated at cost net of accumulated depreciation. Major additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. Depreciation is provided based upon the estimated useful lives, or lease term if shorter, under the straight-line method. Estimated useful lives range from approximately three to eight years for office equipment, eight to 25 years for manufacturing equipment, eight years for land improvements, 40 years for buildings and improvements, and leasehold improvements are depreciated over the shorter of the remaining lives of the improvements or the remaining term of the lease. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations.\n\nBusiness combinations\n\nThe Company records its business combinations under the acquisition method of accounting. Under the acquisition method of accounting, the Company allocates the purchase price of each acquisition to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The fair value of identifiable intangible assets is based upon detailed valuations that use various assumptions made by management. Any excess of the purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. Direct acquisition-related costs are expensed as incurred.\n\nGoodwill\n\nGoodwill represents the excess of the purchase price over the fair value of identifiable net tangible and intangible assets acquired in a business combination.\n\nGoodwill is not amortized, but is reviewed for impairment at least annually or more frequently if impairment indicators arise. Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit may be more likely than not less than its carrying amount, or if significant adverse changes in the Company's future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, the Company can elect to forgo the qualitative assessment and perform the quantitative test. If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, the Company then evaluates goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill.\n\nIntangible Assets\n\nAcquired intangible assets other than goodwill consist of customer relationships, technology and technical know-how and tradenames. Trade names are included in the line item Other intangible assets, net in the Consolidated Balance Sheet. The Company amortizes a portion of its technology and technical know-how, tradenames, and customer relationships in Selling, general and administrative expense on a straight line basis over each of their estimated useful lives of eight to twenty years. A portion of technology and technical know-how are amortized in Cost of products sold over the projected conversion period of nine to ten years which is based on management estimates at the time of purchase. All other intangibles have indefinite lives and are not amortized.\n\nImpairment of long-lived assets\n\nThe Company assesses the impairment of definite-lived long-lived assets or asset groups when events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that are considered in deciding when to perform an impairment review include: a significant decrease in the market price of the asset or asset group; a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction; a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50%.\n\n49\n\n \n\nRecoverability potential is measured by comparing the carrying amount of the asset or asset group to its related total future undiscounted cash flows. If the carrying value is not recoverable through related cash flows, the asset or asset group is considered to be impaired. Impairment is measured by comparing the asset or asset group's carrying amount to its fair value. When it is determined that useful lives of assets are shorter than originally estimated, and no impairment is present, the rate of depreciation is accelerated in order to fully depreciate the assets over their new shorter useful lives.\n\nGoodwill and intangible assets with indefinite lives are tested annually for impairment. The Company assesses goodwill for impairment by comparing the fair value of its reporting units to their carrying amounts. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill within the reporting unit is less than its carrying value. Fair values for reporting units are determined based on a weighted combination of the market approach and the income approach using discounted cash flows. Indefinite lived intangible assets are assessed for impairment by comparing the fair value of the asset to its carrying value.\n\nOther Long-Term Assets\n\nOther long-term assets include service based cloud computing software implementation costs of $2,763 as of March 31, 2026. Upon implementation completion, these costs will be amortized over the expected term of the hosting arrangement on a straight line basis.\n\nProduct warranties\n\nThe Company estimates the costs that may be incurred under its product warranties and records a liability in the amount of such costs at the time revenue is recognized. The reserve for product warranties is based upon past claims experience and ongoing evaluations of any specific probable claims from customers. A reconciliation of the changes in the product warranty liability is presented in Note 7.\n\nResearch and development\n\nResearch and development costs are expensed as incurred. The Company incurred research and development costs of $6,354, $4,039 and $3,944 in fiscal 2026, fiscal 2025 and fiscal 2024, respectively. Research and development costs are included in the line item Selling, general and administrative in the Consolidated Statements of Operations.\n\nIncome taxes\n\nThe Company recognizes deferred income tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. Deferred income tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using currently enacted tax rates. The Company evaluates the available evidence about future taxable income and other possible sources of realization of deferred income tax assets and records a valuation allowance to reduce deferred income tax assets to an amount that represents the Company's best estimate of the amount of such deferred income tax assets that more likely than not will be realized.\n\nThe Company accounts for uncertain tax positions using a \"more likely than not\" recognition threshold. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective resolution of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. These tax positions are evaluated on a quarterly basis. It is the Company's policy to recognize any interest related to uncertain tax positions in interest expense and any penalties related to uncertain tax positions in Selling, general and administrative expense.\n\nThe Company files federal and state income tax returns in several U.S. and non-U.S. domestic and foreign jurisdictions. In most tax jurisdictions, returns are subject to examination by the relevant tax authorities for a number of years after the returns have been filed.\n\nEquity-based compensation\n\nThe Company records compensation costs related to equity-based awards based on the estimated fair value of the award on the grant date. Compensation cost is recognized in the Company's Consolidated Statements of Operations over the applicable vesting period. For service and performance based restricted stock awards and restricted stock units, the fair market value of the award is determined based upon the closing value of the Company's stock price on the grant date. The fair market value of market-based performance restricted stock awards is determined using the Monte Carlo valuation model. The amount of equity-based compensation expense recognized during a period is based on the portion of the awards that ultimately vest.\n\nIncome per share data\n\n50\n\n \n\nBasic income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted income per share is calculated by dividing net income by the weighted average number of common shares outstanding and, when applicable, potential common shares outstanding during the period.\n\nA reconciliation of the numerators and denominators of basic and diluted income per share is presented below:\n\n \n\n \n\n \n\nYears ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nBasic income per share:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNumerator:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n$\n\n12,500\n\n \n\n \n\n$\n\n12,230\n\n \n\n \n\n$\n\n4,556\n\n \n\nDenominator:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted average common shares outstanding\n\n \n\n \n\n10,988\n\n \n\n \n\n \n\n10,884\n\n \n\n \n\n \n\n10,743\n\n \n\nBasic income per share\n\n \n\n$\n\n1.14\n\n \n\n \n\n$\n\n1.12\n\n \n\n \n\n$\n\n0.42\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDiluted income per share:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNumerator:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n$\n\n12,500\n\n \n\n \n\n$\n\n12,230\n\n \n\n \n\n$\n\n4,556\n\n \n\nDenominator:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted average common shares outstanding\n\n \n\n \n\n10,988\n\n \n\n \n\n \n\n10,884\n\n \n\n \n\n \n\n10,743\n\n \n\nRestricted stock units outstanding\n\n \n\n \n\n150\n\n \n\n \n\n \n\n182\n\n \n\n \n\n \n\n101\n\n \n\nWeighted average common and potential common\n   shares outstanding\n\n \n\n \n\n11,138\n\n \n\n \n\n \n\n11,066\n\n \n\n \n\n \n\n10,844\n\n \n\nDiluted income per share\n\n \n\n$\n\n1.12\n\n \n\n \n\n$\n\n1.11\n\n \n\n \n\n$\n\n0.42\n\n \n\nCash flow statement\n\nInterest and income taxes paid as well as non-cash investing and financing activities are as follows:\n\n \n\n \n\nYear ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nInterest paid\n\n \n\n$\n\n495\n\n \n\n \n\n$\n\n298\n\n \n\n \n\n$\n\n823\n\n \n\nIncome taxes paid, net of refunds\n\n \n\n \n\n(36\n\n)\n\n \n\n \n\n3,982\n\n \n\n \n\n \n\n425\n\n \n\nPension and other post retirement income adjustments, net of income tax\n\n \n\n \n\n1,087\n\n \n\n \n\n \n\n105\n\n \n\n \n\n \n\n694\n\n \n\nCapital purchases recorded in accounts payable\n\n \n\n \n\n1,037\n\n \n\n \n\n \n\n3,951\n\n \n\n \n\n \n\n620\n\n \n\nIssuance of shares as consideration in business acquisitions\n\n \n\n \n\n5,678\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n1,930\n\n \n\nAccumulated other comprehensive income (loss)\n\nComprehensive income is comprised of net income and other comprehensive income or loss items, which are accumulated as a separate component of stockholders' equity. For the Company, other comprehensive income or loss items include foreign currency translation adjustments and pension and other postretirement benefit adjustments.\n\nFair value measurements\n\nFair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the \"exit price\") in an orderly transaction between market participants at the measurement date. The accounting standard for fair value establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:\n\nLevel 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.\n\n51\n\n \n\nLevel 2 – Valuations determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.\n\nLevel 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.\n\nThe availability of observable inputs can vary and is affected by a wide variety of factors, including, the type of asset/liability, whether the asset/liability is established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.\n\nFair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are required to reflect those that market participants would use in pricing the asset or liability at the measurement date.\n\nUse of Estimates\n\nThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of sales and expenses during the reporting period. Actual results could differ materially from those estimates.\n\nAccounting and reporting changes\n\nIn 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 Company’s 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 Company’s Consolidated Financial Statements.\n\nIn 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.\n\nIn November 2024, the FASB issued ASU No. 2024-03 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.\n\n \n\nNote 2 - Acquisitions\n\nFlackTek 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.\n\nThis 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 earnouts over four years beginning with fiscal 2027, based upon achieving progressively increasing adjusted\n\n52\n\n \n\nEBITDA performance targets each year. At the acquisition date, a liability of $5,638 was recorded for the contingent earn-out.\n\nThe preliminary purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair value at the date of acquisition and the amount exceeding the fair value of $11,844 was recorded as goodwill, which is deductible for tax purposes. Goodwill generated in the acquisition is related to FlackTek’s assembled workforce, synergies between the Company’s other operations and FlackTek that are expected to occur as a result of the combined engineering knowledge, the ability of each of the operations to leverage each other’s technology solutions, and the Company’s ability to utilize acquired management's knowledge in providing complementary product offerings to the Company’s customers. The following table summarizes the preliminary purchase price allocation of the assets acquired and liabilities assumed:\n\n \n\n \n\nJanuary 23,\n\n \n\n \n\n \n\n2026\n\n \n\nAssets acquired:\n\n \n\n \n\n \n\n  Cash and cash equivalents\n\n \n\n$\n\n66\n\n \n\n  Trade accounts receivable, net of allowances\n\n \n\n \n\n3,985\n\n \n\n  Inventories\n\n \n\n \n\n4,154\n\n \n\n  Prepaid expenses and other current assets\n\n \n\n \n\n84\n\n \n\n  Property, plant & equipment, net\n\n \n\n \n\n2,030\n\n \n\n  Operating lease assets\n\n \n\n \n\n1,448\n\n \n\n  Goodwill\n\n \n\n \n\n11,844\n\n \n\n  Customer relationships\n\n \n\n \n\n3,400\n\n \n\n  Technology and technical know-how\n\n \n\n \n\n13,300\n\n \n\n  Tradename\n\n \n\n \n\n6,700\n\n \n\n  Other long term asset\n\n \n\n \n\n31\n\n \n\nTotal assets acquired\n\n \n\n \n\n47,042\n\n \n\nLiabilities assumed:\n\n \n\n \n\n \n\n  Accounts payable\n\n \n\n \n\n2,237\n\n \n\n  Accrued compensation\n\n \n\n \n\n596\n\n \n\n  Accrued expenses and other current liabilities\n\n \n\n \n\n3,988\n\n \n\n  Customer deposits\n\n \n\n \n\n1,751\n\n \n\n  Operating lease liabilities\n\n \n\n \n\n1,448\n\n \n\nTotal liabilities assumed\n\n \n\n \n\n10,020\n\n \n\nPurchase price\n\n \n\n$\n\n37,022\n\n \n\nThe fair value of acquisition-related intangible assets includes customer relationships, technology and technical know-how, and tradename. The tradename is an indefinite-lived intangible asset and is included in the line item Other intangible assets, net in the Consolidated Balance Sheets. The fair value of tradename was calculated using a Relief from Royalty method, which develops a market based royalty rate used to reflect the after tax royalty savings attributable to owning the intangible asset. The fair value of customer relationships and technology and technical know-how were calculated using an income approach, specifically the Multi Period Excess Earnings method, which incorporates assumptions regarding retention rate, new customer growth, obsolescence factors, and customer related costs.\n\nCustomer relationships are amortized in selling, general and administrative expense on a straight line basis over their estimated useful lives of twelve years. Technology and technical know-how is amortized in cost of products sold on a straight line basis over its estimated useful life of nine years.\n\nThe Consolidated Statement of Operations for the year ended March 31, 2026 includes net sales of FlackTek of $2,767 and net loss of ($916).\n\nXdot\n\nOn October 20, 2025, the Company completed its acquisition of Xdot, a specialized consulting, design, and engineering firm focused on foil bearing technology. Xdot has been integrated into the BN business. The purchase price of this transaction consisted of cash consideration of $900 at close, subject to certain potential adjustments including a customary working capital adjustment, and was funded with cash on hand. The purchase agreement included two potential cash contingent earnouts to be paid on the first and second anniversary of the transaction, dependent upon the achievement of certain qualitative milestones totaling $600. As of the acquisition date, a $507 contingent earn-out liability was recorded. The Company preliminarily recorded goodwill in the amount of $714, as well as an intangible asset for technology and technical know-how in the amount of $650, which will be amortized over its estimated useful life of ten years, and are deductible for tax purposes. The sales and results of Xdot were immaterial to fiscal 2026.\n\n53\n\n \n\nP3\n\nOn November 9, 2023, the Company completed its acquisition of P3, a privately-owned custom turbomachinery engineering, product development, and manufacturing business located in Jupiter, FL that serves the Space, New Energy, Defense, and Medical industries. The Company believes this acquisition advances its growth strategy, further diversifies its market and product offerings, and broadens its turbomachinery solutions. P3 is managed through BN, is highly complementary to BN's technology, and enhances its turbomachinery solutions.\n\nThis 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 $11,238 was comprised of 125 shares of the Company's common stock, representing a value of $1,930, and cash consideration of $7,268. The cash consideration was funded through borrowings on the Company's line of credit. The purchase agreement included a contingent earn-out dependent upon certain financial measures of P3 post-acquisition, in which the sellers are eligible to receive up to $3,000 in additional cash consideration.\n\nThe cost of the acquisition was allocated to the assets acquired and liabilities assumed based upon their estimated fair value at the date of acquisition and the amount exceeding the fair value of $1,997 was recorded as goodwill, which is deductible for tax purposes. Goodwill generated in the acquisition is related to P3’s assembled workforce, synergies between the Company’s other operations and P3 that are expected to occur as a result of the combined engineering knowledge, the ability of each of the operations to leverage each other’s technology solutions, and the Company’s ability to utilize acquired management knowledge in providing complementary product offerings to the Company’s customers. The following table summarizes the final purchase price allocation of the assets acquired and liabilities assumed:\n\n \n\n \n\nNovember 9,\n\n \n\n \n\n \n\n2023\n\n \n\nAssets acquired:\n\n \n\n \n\n \n\n  Cash and cash equivalents\n\n \n\n$\n\n286\n\n \n\n  Trade accounts receivable, net of allowances\n\n \n\n \n\n465\n\n \n\n  Unbilled revenue\n\n \n\n \n\n302\n\n \n\n  Inventories\n\n \n\n \n\n808\n\n \n\n  Prepaid expenses and other current assets\n\n \n\n \n\n93\n\n \n\n  Property, plant & equipment, net\n\n \n\n \n\n542\n\n \n\n  Operating lease assets\n\n \n\n \n\n130\n\n \n\n  Goodwill\n\n \n\n \n\n1,997\n\n \n\n  Customer relationships\n\n \n\n \n\n4,400\n\n \n\n  Technology and technical know-how\n\n \n\n \n\n2,500\n\n \n\n  Tradename\n\n \n\n \n\n300\n\n \n\nTotal assets acquired\n\n \n\n \n\n11,823\n\n \n\nLiabilities assumed:\n\n \n\n \n\n \n\n  Accrued compensation\n\n \n\n \n\n62\n\n \n\n  Customer deposits\n\n \n\n \n\n389\n\n \n\n  Operating lease liabilities\n\n \n\n \n\n134\n\n \n\nTotal liabilities assumed\n\n \n\n \n\n585\n\n \n\nPurchase price\n\n \n\n$\n\n11,238\n\n \n\nThe fair value of acquisition-related intangible assets includes customer relationships, technology and technical know-how, and tradename. The tradename is included in the line item Other intangible assets, net in the Consolidated Balance Sheets. The fair value of customer relationships was calculated using an income approach, specifically the Multi Period Excess Earnings method, which incorporates assumptions regarding retention rate, new customer growth and customer related costs. The fair value of tradename and technology and technical know-how were both calculated using a Relief from Royalty method, which develops a market based royalty rate used to reflect the after tax royalty savings attributable to owning the intangible asset.\n\nCustomer relationships and tradename are amortized in Selling, general and administrative expense on a straight line basis over their estimated useful lives of eight years and three years respectively. Technology and technical know-how is amortized in Cost of products sold on a straight line basis over its estimated useful life of ten years.\n\nThe Consolidated Statement of Operations for the year ended March 31, 2024 includes net sales of P3 of $2,206 and net income of $24.\n\nA rollforward of contingent earn-out liabilities is as follows:\n\n \n\n54\n\n \n\nBalance at November 9, 2023\n\n \n\n$\n\n2,040\n\n \n\nChange in fair value\n\n \n\n \n\n80\n\n \n\nPayments\n\n \n\n \n\n—\n\n \n\nBalance at March 31, 2024\n\n \n\n \n\n2,120\n\n \n\nChange in fair value\n\n \n\n \n\n(1,215\n\n)\n\nPayments\n\n \n\n \n\n—\n\n \n\nBalance at March 31, 2025\n\n \n\n \n\n905\n\n \n\nChange in fair value\n\n \n\n \n\n(568\n\n)\n\nAdditional acquisition earn out\n\n \n\n \n\n6,145\n\n \n\nPayments\n\n \n\n \n\n—\n\n \n\nBalance at March 31, 2026\n\n \n\n$\n\n6,482\n\n \n\n \n\nThe change in the fair value of the contingent earn-out liabilities is included in Other operating (income) expense, net in the Consolidated Statements of Operations.\n\nPro forma information\n\nThe following unaudited pro forma information presents the consolidated results of operations of the Company as if the FlackTek acquisition had occurred at the beginning of the year ended March 31, 2025:\n\n \n\n \n\n \n\nFor the Years Ended\n\n \n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\nNet sales\n\n \n\n$\n\n265,731\n\n \n\n \n\n$\n\n234,956\n\n \n\n \n\nNet income\n\n \n\n \n\n13,193\n\n \n\n \n\n \n\n9,412\n\n \n\n \n\nEarnings per share\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n     Basic\n\n \n\n$\n\n1.19\n\n \n\n \n\n$\n\n0.86\n\n \n\n \n\n     Diluted\n\n \n\n$\n\n1.18\n\n \n\n \n\n$\n\n0.84\n\n \n\n \n\n \n\nThe unaudited pro forma information presents the combined operating results of the Company and FlackTek with the results prior to the acquisition date adjusted to include the pro forma impact of the adjustment to interest expense reflecting the cash paid in connection with the acquisition, including acquisition-related expenses, at the Company’s weighted average interest rate, amortization expense related to the fair value adjustments for intangible assets, non-recurring acquisition-related costs and the impact of income taxes on the pro forma adjustments utilizing the applicable statutory tax rate.\n\nThe unaudited pro forma results are presented for illustrative purposes only. These pro forma results do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred as of the beginning of each of the periods presented, nor does the pro forma data intend to be a projection of results that may be obtained in the future.\n\nAcquisition and integration costs of $1,873, $45, and $352, were expensed in fiscal 2026, 2025, and 2024, respectively, and are included in Selling, general and administrative expenses in the Consolidated Statements of Operations.\n\n \n\n \n\nNote 3 – Revenue Recognition:\n\nThe Company recognizes revenue on all contracts when control of the product is transferred to the customer. Control is generally transferred when products are shipped, title is transferred, significant risks of ownership have transferred, the Company has rights to payment, and rewards of ownership pass to the customer.\n\nThe following tables present the Company's net sales disaggregated by market and geographic area:\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\nMarket\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDefense\n\n \n\n$\n\n147,445\n\n \n\n \n\n$\n\n121,925\n\n \n\n \n\n$\n\n99,493\n\n \n\nEnergy & Process\n\n \n\n \n\n83,343\n\n \n\n \n\n \n\n73,287\n\n \n\n \n\n \n\n72,758\n\n \n\nSpace\n\n \n\n \n\n14,505\n\n \n\n \n\n \n\n14,684\n\n \n\n \n\n \n\n13,282\n\n \n\nNet sales\n\n \n\n$\n\n245,293\n\n \n\n \n\n$\n\n209,896\n\n \n\n \n\n$\n\n185,533\n\n \n\n \n\n55\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\nGeographic Area\n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nAsia\n\n \n\n$\n\n12,630\n\n \n\n \n\n$\n\n16,884\n\n \n\n \n\n$\n\n15,144\n\n \n\nCanada\n\n \n\n \n\n11,217\n\n \n\n \n\n \n\n7,586\n\n \n\n \n\n \n\n4,229\n\n \n\nMiddle East\n\n \n\n \n\n7,003\n\n \n\n \n\n \n\n7,088\n\n \n\n \n\n \n\n2,568\n\n \n\nSouth America\n\n \n\n \n\n1,251\n\n \n\n \n\n \n\n1,165\n\n \n\n \n\n \n\n733\n\n \n\nU.S.\n\n \n\n \n\n209,628\n\n \n\n \n\n \n\n169,943\n\n \n\n \n\n \n\n155,908\n\n \n\nAll other\n\n \n\n \n\n3,564\n\n \n\n \n\n \n\n7,230\n\n \n\n \n\n \n\n6,951\n\n \n\nNet sales\n\n \n\n$\n\n245,293\n\n \n\n \n\n$\n\n209,896\n\n \n\n \n\n$\n\n185,533\n\n \n\nThe 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.\n\nA 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. Transaction price reflects the amount of consideration to which the Company expects to be entitled in exchange for transferred products. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized as the performance obligation is satisfied. In certain cases, the Company may separate a contract into more than one performance obligation, while in other cases, several products may be part of a fully integrated solution and are bundled into a single performance obligation. If a contract is separated into more than one performance obligation, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods underlying each performance obligation. The Company has made an accounting policy election to exclude from the measurement of the contract price all taxes assessed by government authorities that are collected by the Company from its customers. The Company does not adjust the contract price for the effects of a financing component if the Company expects, at contract inception, that the period between when a product is transferred to a customer and when the customer pays for the product will be one year or less.\n\nThe Company recognizes revenue over time when contract performance results in the creation of a product for which the Company does not have an alternative use and the contract includes an enforceable right to payment in an amount that corresponds directly with the value of the performance completed. To measure progress towards completion on performance obligations for which revenue is recognized over time, the Company utilizes an input method based upon a ratio of direct labor hours incurred to date to management’s estimate of the total labor hours to be incurred on each contract, an input method based upon a ratio of total contract costs incurred to date to management's estimate of the total contract costs to be incurred or an output method based upon completion of operational milestones, depending upon the nature of the contract. The Company has established the systems and procedures essential to developing the estimates required to account for performance obligations over time. These procedures include monthly review by management of costs incurred, progress towards completion, identified risks and opportunities, sourcing determinations, changes in estimates of costs yet to be incurred, availability of materials, and execution by subcontractors. Sales and earnings are adjusted on a cumulative catch-up basis in current accounting periods based upon revisions in the contract value due to pricing changes and estimated costs at completion. Losses on contracts are recognized immediately when evident to management. Revenue on the majority of the Company’s contracts, as measured by number of contracts, is recognized upon shipment to the customer. Revenue on larger contracts, which are fewer in number but generally represent the majority of revenue, is recognized over time as these contracts meet specific criteria established in ASC 606. The following table presents the Company's revenue percentages disaggregated by revenue recognized over time or upon shipment:\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRevenue recognized over time\n\n \n\n \n\n82\n\n%\n\n \n\n \n\n80\n\n%\n\n \n\n \n\n77\n\n%\n\nRevenue recognized at shipment\n\n \n\n \n\n18\n\n%\n\n \n\n \n\n20\n\n%\n\n \n\n \n\n23\n\n%\n\nThe timing of revenue recognition, invoicing and cash collections affect trade accounts receivable, unbilled revenue (contract assets) and customer deposits (contract liabilities) on the Consolidated Balance Sheets. Unbilled revenue represents revenue on contracts that is recognized over time and exceeds the amount that has been billed to the customer. Unbilled revenue is separately presented in the Consolidated Balance Sheets. The Company may receive a progress payment from a customer, which is recorded as a customer deposit or have an unconditional right to receive a customer deposit prior to revenue being recognized. Because the performance obligations related to such customer deposits may not have been satisfied, a contract liability is recorded and an offsetting asset of equal amount is recorded as a trade accounts receivable until the deposit is collected. Customer deposits are separately presented in the Consolidated Balance Sheets. Customer deposits are not considered a significant financing component as they are generally received less than one year before the product is completed or used to procure specific material on a contract, as well as related overhead costs incurred during design and construction.\n\n56\n\n \n\nNet contract assets (liabilities) consisted of the following:\n\n \n\n \n\n \n\nMarch 31, 2026\n\n \n\n \n\nMarch 31, 2025\n\n \n\n \n\nChange\n\n \n\n \n\nChange due to amounts acquired\n\n \n\n \n\nChange due to revenue recognized\n\n \n\n \n\nChange due to invoicing customers/\nadditional deposits\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nUnbilled revenue (contract assets)\n\n \n\n$\n\n59,868\n\n \n\n \n\n$\n\n38,494\n\n \n\n \n\n$\n\n21,374\n\n \n\n \n\n$\n\n29\n\n \n\n \n\n$\n\n120,829\n\n \n\n \n\n$\n\n(99,484\n\n)\n\nCustomer deposits (contract liabilities)\n\n \n\n \n\n(102,421\n\n)\n\n \n\n \n\n(84,062\n\n)\n\n \n\n \n\n(18,359\n\n)\n\n \n\n \n\n(1,840\n\n)\n\n \n\n \n\n68,923\n\n \n\n \n\n \n\n(85,442\n\n)\n\n      Net contract (liabilities) assets\n\n \n\n$\n\n(42,553\n\n)\n\n \n\n$\n\n(45,568\n\n)\n\n \n\n$\n\n3,015\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nContract liabilities at March 31, 2026 and 2025 include $4,560 and $12,315, respectively, of customer deposits for which the Company has an unconditional right to collect payment. Trade accounts receivable, as presented on the Consolidated Balance Sheets, includes corresponding balances at March 31, 2026 and 2025, respectively.\n\nReceivables billed but not paid under retainage provisions in the Company’s customer contracts were $2,419 and $1,999 at March 31, 2026 and 2025, respectively.\n\n \n\nThe Company's remaining unsatisfied performance obligations represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. The Company also refers to this measure as backlog. As of March 31, 2026, the Company had remaining unsatisfied performance obligations of $532,637. The Company expects to recognize revenue on approximately 35% to 40% of the remaining performance obligations within one year, 20% to 25% in one to two years and the remaining beyond two years.\n\n \n\nNote 4 – Inventories:\n\nMajor classifications of inventories are as follows:\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nRaw materials and supplies\n\n \n\n$\n\n9,342\n\n \n\n \n\n$\n\n5,859\n\n \n\nWork in process\n\n \n\n \n\n39,685\n\n \n\n \n\n \n\n32,579\n\n \n\nFinished products\n\n \n\n \n\n1,731\n\n \n\n \n\n \n\n1,587\n\n \n\n \n\n \n\n$\n\n50,758\n\n \n\n \n\n$\n\n40,025\n\n \n\n \n\nNote 5 – Property, Plant and Equipment:\n\nMajor classifications of property, plant and equipment are as follows:\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nLand and land improvements\n\n \n\n$\n\n3,106\n\n \n\n \n\n$\n\n3,071\n\n \n\nBuildings and leasehold improvements\n\n \n\n \n\n36,808\n\n \n\n \n\n \n\n24,792\n\n \n\nMachinery and equipment\n\n \n\n \n\n67,174\n\n \n\n \n\n \n\n51,529\n\n \n\nConstruction in progress\n\n \n\n \n\n7,097\n\n \n\n \n\n \n\n20,078\n\n \n\n \n\n \n\n \n\n114,185\n\n \n\n \n\n \n\n99,470\n\n \n\nLess – accumulated depreciation and amortization\n\n \n\n \n\n(53,855\n\n)\n\n \n\n \n\n(48,821\n\n)\n\n \n\n \n\n$\n\n60,330\n\n \n\n \n\n$\n\n50,649\n\n \n\n \n\nDepreciation expense in fiscal 2026, fiscal 2025 and fiscal 2024 was $5,337, $3,718, and $3,275, respectively.\n\n \n\n \n\n \n\n57\n\n \n\nNote 6 – Intangible Assets:\n\nIntangible assets are comprised of the following:\n\n \n\n \n\n \n\nWeighted Average Amortization Period\n\n \n\nGross Carrying Amount\n\n \n\n \n\nAccumulated Amortization\n\n \n\n \n\nNet Carrying Amount\n\n \n\nAt March 31, 2026\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIntangibles subject to amortization:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCustomer relationships\n\n \n\n8 - 20 years\n\n \n\n$\n\n19,600\n\n \n\n \n\n$\n\n4,228\n\n \n\n \n\n$\n\n15,372\n\n \n\nTechnology and technical know-how\n\n \n\n9 - 20 years\n\n \n\n \n\n26,550\n\n \n\n \n\n \n\n3,318\n\n \n\n \n\n \n\n23,232\n\n \n\nTradename\n\n \n\n3 years\n\n \n\n \n\n300\n\n \n\n \n\n \n\n242\n\n \n\n \n\n \n\n58\n\n \n\n \n\n \n\n \n\n \n\n$\n\n46,450\n\n \n\n \n\n$\n\n7,788\n\n \n\n \n\n$\n\n38,662\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIntangibles not subject to amortization:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nGoodwill\n\n \n\nIndefinite\n\n \n\n$\n\n38,078\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n38,078\n\n \n\nTradename\n\n \n\nIndefinite\n\n \n\n \n\n13,400\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n13,400\n\n \n\n \n\n \n\n \n\n \n\n$\n\n51,478\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n51,478\n\n \n\n \n\n \n\n \n\nWeighted Average Amortization Period\n\n \n\nGross Carrying Amount\n\n \n\n \n\nAccumulated Amortization\n\n \n\n \n\nNet Carrying Amount\n\n \n\nAt March 31, 2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIntangibles subject to amortization:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCustomer relationships\n\n \n\n8 - 20 years\n\n \n\n$\n\n16,200\n\n \n\n \n\n$\n\n3,041\n\n \n\n \n\n$\n\n13,159\n\n \n\nTechnology and technical know-how\n\n \n\n10 - 20 years\n\n \n\n \n\n12,600\n\n \n\n \n\n \n\n2,290\n\n \n\n \n\n \n\n10,310\n\n \n\nBacklog\n\n \n\n4 years\n\n \n\n \n\n3,900\n\n \n\n \n\n \n\n3,900\n\n \n\n \n\n \n\n—\n\n \n\nTradename\n\n \n\n3 years\n\n \n\n \n\n300\n\n \n\n \n\n \n\n142\n\n \n\n \n\n \n\n158\n\n \n\n \n\n \n\n \n\n \n\n$\n\n33,000\n\n \n\n \n\n$\n\n9,373\n\n \n\n \n\n$\n\n23,627\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIntangibles not subject to amortization:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nGoodwill\n\n \n\nIndefinite\n\n \n\n$\n\n25,520\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n25,520\n\n \n\nTradename\n\n \n\nIndefinite\n\n \n\n \n\n6,700\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n6,700\n\n \n\n \n\n \n\n \n\n \n\n$\n\n32,220\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n32,220\n\n \n\n \n\nA 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 $2,315, $2,218 and $2,157 for fiscal 2026, fiscal 2025 and fiscal 2024, respectively. Inventory step up amortization of $191 was expensed in fiscal 2026 for the FlackTek acquisition. The estimated annual amortization expense is as follows:\n\n \n\n \n\n \n\nAnnual Amortization\n\n \n\n2027\n\n \n\n$\n\n3,780\n\n \n\n2028\n\n \n\n \n\n3,721\n\n \n\n2029\n\n \n\n \n\n3,721\n\n \n\n2030\n\n \n\n \n\n3,721\n\n \n\n2031\n\n \n\n \n\n3,721\n\n \n\n2032 and thereafter\n\n \n\n \n\n19,998\n\n \n\nTotal intangible amortization\n\n \n\n$\n\n38,662\n\n \n\n \n\n58\n\n \n\nNote 7 – Product Warranty Liability:\n\nA reconciliation of the changes in product warranty liability is as follows:\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nBalance at beginning of year\n\n \n\n$\n\n786\n\n \n\n \n\n$\n\n806\n\n \n\nWarranty accrual acquired\n\n \n\n \n\n172\n\n \n\n \n\n \n\n—\n\n \n\nExpense for product warranties\n\n \n\n \n\n165\n\n \n\n \n\n \n\n326\n\n \n\nProduct warranty claims paid\n\n \n\n \n\n(106\n\n)\n\n \n\n \n\n(346\n\n)\n\nBalance at end of year\n\n \n\n$\n\n1,017\n\n \n\n \n\n$\n\n786\n\n \n\n \n\nThe product warranty liability is included in the line item Accrued expenses and other current liabilities in the Consolidated Balance Sheets.\n\n \n\nNote 8 - Leases:\n\nThe Company leases certain manufacturing facilities, office space, machinery and office equipment. An arrangement is considered to contain a lease if it conveys the right to use and control an identified asset for a period of time in exchange for consideration. If it is determined that an arrangement contains a lease, then a classification of a lease as operating or finance is determined by evaluating the five criteria outlined in the lease accounting guidance at inception. Leases generally have remaining terms of one year to five years, whereas leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets. The depreciable life of leased assets related to finance leases is limited by the expected term of the lease, unless there is a transfer of title or purchase option that the Company believes is reasonably certain of exercise. Certain leases include options to renew or terminate. Renewal options are exercisable per the discretion of the Company and vary based on the nature of each lease. The term of the lease includes renewal periods only if the Company is reasonably certain that it will exercise the renewal option. When determining if a renewal option is reasonably certain of being exercised, the Company considers several factors, including but not limited to, the cost of moving to another location, the cost of disrupting operations, whether the purpose or location of the leased asset is unique and the contractual terms associated with extending the lease. The Company’s lease agreements do not contain any residual value guarantees or any material restrictive covenants and the Company does not sublease to any third parties. As of March 31, 2026, the Company did not have any material leases that have been signed but not commenced.\n\nRight-of-use (\"ROU\") lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments in exchange for that right of use. Finance lease ROU assets and operating lease ROU assets are included in the line items Property, plant and equipment, net and Operating lease assets, respectively, in the Consolidated Balance Sheets. The current portion and non-current portion of finance and operating lease liabilities are all presented separately in the Consolidated Balance Sheets.\n\nThe Company has entered into operating leases with companies in which our Executive Chairman holds a majority interest for certain buildings, equipment, and storage units located in Arvada, Colorado. In connection with such leases and rental agreements, the Company made fixed minimum lease payments to the lessor of $1,016, $990 and $952 in fiscal 2026, 2025 and 2024, respectively. Future minimum lease payments under these leases as of March 31, 2026 are $3,786.\n\nThe discount rate implicit within the Company's leases is generally not readily determinable, and therefore, the Company uses an incremental borrowing rate in determining the present value of lease payments based on rates available at commencement.\n\nThe weighted average remaining lease term and discount rate for finance and operating leases are as follows:\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nFinance Leases\n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted-average remaining lease term in years\n\n \n\n \n\n1.83\n\n \n\n \n\n \n\n2.83\n\n \n\nWeighted-average discount rate\n\n \n\n \n\n7.75\n\n%\n\n \n\n \n\n7.75\n\n%\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating Leases\n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted-average remaining lease term in years\n\n \n\n \n\n3.90\n\n \n\n \n\n \n\n4.94\n\n \n\nWeighted-average discount rate\n\n \n\n \n\n3.71\n\n%\n\n \n\n \n\n3.42\n\n%\n\n \n\n59\n\n \n\nThe components of lease expense are as follows:\n\n \n\n \n\n \n\nYear Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nFinance lease cost:\n\n \n\n \n\n \n\n \n\n \n\n \n\n  Amortization of right-of-use assets\n\n \n\n$\n\n13\n\n \n\n \n\n$\n\n13\n\n \n\n  Interest on lease liabilities\n\n \n\n \n\n4\n\n \n\n \n\n \n\n6\n\n \n\nOperating lease cost\n\n \n\n \n\n1,655\n\n \n\n \n\n \n\n1,527\n\n \n\nShort-term lease cost\n\n \n\n \n\n58\n\n \n\n \n\n \n\n25\n\n \n\nTotal lease cost\n\n \n\n$\n\n1,730\n\n \n\n \n\n$\n\n1,571\n\n \n\nOperating lease costs during fiscal 2026, fiscal 2025 and fiscal 2024 were included within Cost of products sold and Selling, general and administrative expenses.\n\nAs of March 31, 2026, future minimum payments required under non-cancelable leases are:\n\n \n\n \n\n \n\nOperating\nLeases\n\n \n\n \n\nFinance\nLeases\n\n \n\n2027\n\n \n\n$\n\n2,036\n\n \n\n \n\n$\n\n26\n\n \n\n2028\n\n \n\n \n\n1,870\n\n \n\n \n\n \n\n21\n\n \n\n2029\n\n \n\n \n\n1,902\n\n \n\n \n\n \n\n—\n\n \n\n2030\n\n \n\n \n\n1,623\n\n \n\n \n\n \n\n—\n\n \n\n2031\n\n \n\n \n\n252\n\n \n\n \n\n \n\n—\n\n \n\nTotal lease payments\n\n \n\n \n\n7,683\n\n \n\n \n\n \n\n47\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLess – amount representing interest\n\n \n\n \n\n(534\n\n)\n\n \n\n \n\n(3\n\n)\n\nPresent value of net minimum lease payments\n\n \n\n$\n\n7,149\n\n \n\n \n\n$\n\n44\n\n \n\nROU assets obtained in exchange for new operating lease liabilities were $268 and $374 in fiscal 2026 and fiscal 2025, respectively.\n\n \n\nNote 9 - Debt:\n\nOn 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 existence 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.\n\nThe 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 requirements specified in the Revolving Credit Facility. As of March 31, 2026, the Company was in compliance with the financial covenants of the Revolving Credit Facility.\n\nBorrowings under the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (i) a forward-looking term rate based on the secured overnight financing rate (\"SOFR\") for the applicable interest period, subject to a floor of 0.0% per annum or (ii) a base rate determined by reference to the highest of (a) the rate of interest per annum publicly announced by the Lender as its prime rate, (b) the federal funds rate plus 0.50% per annum and (c) one-month term SOFR plus 1.00% per annum, subject to a floor of 1.00% per annum, plus, in each case, an applicable margin. The applicable margins range between (i) 1.25% per annum and 2.50% per annum in the case of any term SOFR loan and (ii) 0.25% per annum and 1.50% per annum in the case of any base rate loan, in each case based upon the Company’s then-current consolidated total leverage ratio; provided, however, for a period of one year following the closing date, the applicable margin shall be set at 1.25% per annum in the case of any term SOFR loan and 0.25% per annum in the case of any base rate loan. As of March 31, 2026, the SOFR rate was 3.68%.\n\nThe Company is required to pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility during the applicable quarter at a per annum rate also determined by reference to the Company’s then-current consolidated total leverage ratio, which fee ranges between 0.10% per annum and 0.20% per annum. Any outstanding letters of credit issued under the Revolving Credit Facility will bear a fee equal to the daily amount drawn under such letters of credit multiplied by the applicable margin for the SOFR\n\n60\n\n \n\nloans. As of March 31, 2026, the amount available under the Revolving Credit Facility was $60,889, subject to the interest and leverage covenants.\n\nIn connection with the termination of the old revolving credit facility and term loan on October 13, 2023, with Bank of America, the Company paid $752 in exit costs and recognized an extinguishment charge of $726 in fiscal year ended March 31, 2024.\n\nAs of March 31, 2026, $606 letters of credit are outstanding with HSBC Bank USA, N.A and are cash secured. These outstanding letters of credit are subject to a fee of between 0.75% and 0.85% per annum, depending on the term of the letter of credit. As of March 31, 2026, $224 letters of credit are outstanding with Axis Bank and are cash secured. Additionally, we have a 20,000 RMB bank guaranty line of credit with China Citic Bank Co. LTD which had $549 letters of credit outstanding at March 31, 2026. Outstanding letters of credit under this agreement are subject to a fee of 0.60% per annum. We also have a 445,000 INR bank guaranty line of credit with HSBC Bank, India. Outstanding letters of credit under this agreement are subject to a fee of 0.60% per annum. As of March 31, 2026, $1,680 letters of credit are outstanding at HSBC Bank, India. Total letters of credit outstanding as of March 31, 2026 and March 31, 2025 were $9,170 and $10,997, respectively.\n\n \n\nNote 10 - Financial Instruments and Derivative Financial Instruments:\n\nConcentrations of Credit Risk\n\nFinancial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, and trade accounts receivable. The Company places its cash and cash equivalents with high credit quality financial institutions, and evaluates the credit worthiness of these financial institutions on a regular basis. Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of customers comprising the Company's customer base and their geographic dispersion. At March 31, 2026 and 2025, the Company had no significant concentrations of credit risk.\n\nLetters of Credit\n\nThe Company has entered into standby letter of credit agreements with financial institutions relating to the guarantee of future performance on certain contracts. At March 31, 2026 and 2025, the Company was contingently liable on outstanding standby letters of credit aggregating $9,170 and $10,997, respectively.\n\nFair Value of Financial Instruments\n\nThe estimates of the fair value of financial instruments are summarized as follows:\n\nCash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value due to the short-term maturity of these instruments and are considered Level 1 assets in the fair value hierarchy.\n\nShort-term and long-term debt: The carrying values of credit facilities with variable rates of interest approximates fair values and is considered a Level 2 liability in the fair value hierarchy.\n\nContingent consideration: In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the contingent payments it expects to make as of the acquisition date. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing, amount of, or the likelihood of achieving the applicable performance target. Increases in projected revenues, estimated cash flows and probabilities of payment may result in significantly higher fair value measurements; decreases in these items may have the opposite effect. Increases in the discount rates in periods prior to payment may result in significantly lower fair value measurements and decreases in the discount rates may have the opposite effect. The contingent consideration fair value measurement is based on significant inputs not observable in the market and therefore constitute Level 3 inputs within the fair value hierarchy.\n\n \n\nNote 11 – Income Taxes:\n\nAn analysis of the components of income before provision for income taxes is presented below:\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nUnited States\n\n \n\n$\n\n15,038\n\n \n\n \n\n$\n\n14,381\n\n \n\n \n\n$\n\n5,077\n\n \n\nAsia\n\n \n\n \n\n(278\n\n)\n\n \n\n \n\n1,026\n\n \n\n \n\n \n\n497\n\n \n\nIncome before provision for income taxes\n\n \n\n$\n\n14,760\n\n \n\n \n\n$\n\n15,407\n\n \n\n \n\n$\n\n5,574\n\n \n\n \n\n61\n\n \n\nThe provision for income taxes consists of:\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nCurrent:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal\n\n \n\n$\n\n170\n\n \n\n \n\n$\n\n1,387\n\n \n\n \n\n$\n\n1,133\n\n \n\nState\n\n \n\n \n\n154\n\n \n\n \n\n \n\n37\n\n \n\n \n\n \n\n100\n\n \n\nForeign\n\n \n\n \n\n8\n\n \n\n \n\n \n\n282\n\n \n\n \n\n \n\n257\n\n \n\n \n\n \n\n \n\n332\n\n \n\n \n\n \n\n1,706\n\n \n\n \n\n \n\n1,490\n\n \n\nDeferred:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal\n\n \n\n \n\n2,030\n\n \n\n \n\n \n\n5,429\n\n \n\n \n\n \n\n(419\n\n)\n\nState\n\n \n\n \n\n(16\n\n)\n\n \n\n \n\n210\n\n \n\n \n\n \n\n88\n\n \n\nForeign\n\n \n\n \n\n(124\n\n)\n\n \n\n \n\n25\n\n \n\n \n\n \n\n(106\n\n)\n\nChanges in valuation allowance\n\n \n\n \n\n38\n\n \n\n \n\n \n\n(4,193\n\n)\n\n \n\n \n\n(35\n\n)\n\n \n\n \n\n \n\n1,928\n\n \n\n \n\n \n\n1,471\n\n \n\n \n\n \n\n(472\n\n)\n\nTotal provision for income taxes\n\n \n\n$\n\n2,260\n\n \n\n \n\n$\n\n3,177\n\n \n\n \n\n$\n\n1,018\n\n \n\n \n\nBelow is a tabular rate reconciliation pursuant to the disclosure requirements of ASU 2023-09, adopted prospectively for the year ended March 31, 2026:\n\n \n\n \n\nYear ended March 31, 2026\n\n \n\n \n\n \n\nAmount\n\n \n\n \n\nPercent\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProvision for income taxes as U.S. federal statutory rate\n\n \n\n$\n\n3,100\n\n \n\n \n\n \n\n21.0\n\n%\n\nState and local income taxes, net of federal income tax effect\n\n \n\n \n\n139\n\n \n\n \n\n \n\n0.9\n\n%\n\nForeign tax effects\n\n \n\n \n\n(60\n\n)\n\n \n\n \n\n(0.4\n\n)%\n\nNontaxable or nondeductible items\n\n \n\n \n\n \n\n \n\n \n\n \n\n162(m)\n\n \n\n \n\n604\n\n \n\n \n\n \n\n4.1\n\n%\n\nShare based compensation\n\n \n\n \n\n(667\n\n)\n\n \n\n \n\n(4.5\n\n)%\n\nOther\n\n \n\n \n\n(31\n\n)\n\n \n\n \n\n(0.2\n\n)%\n\nEffect of cross-border tax laws\n\n \n\n \n\n(30\n\n)\n\n \n\n \n\n(0.2\n\n)%\n\nTax credits\n\n \n\n \n\n \n\n \n\n \n\n \n\nR&D tax credit\n\n \n\n \n\n(790\n\n)\n\n \n\n \n\n(5.4\n\n)%\n\nOther\n\n \n\n \n\n(5\n\n)\n\n \n\n \n\n—\n\n \n\nEffective tax rate\n\n \n\n$\n\n2,260\n\n \n\n \n\n \n\n15.3\n\n%\n\n \n\n62\n\n \n\n \n\n \n\nThe reconciliation of the provision calculated using the U.S. federal tax rate with the provision for income taxes presented in the consolidated financial statements is as follows:\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nProvision for income taxes at federal rate\n\n \n\n$\n\n3,238\n\n \n\n \n\n$\n\n1,170\n\n \n\nState taxes\n\n \n\n \n\n196\n\n \n\n \n\n \n\n156\n\n \n\nCharges not deductible for income tax purposes\n\n \n\n \n\n45\n\n \n\n \n\n \n\n54\n\n \n\nStock based compensation\n\n \n\n \n\n(382\n\n)\n\n \n\n \n\n(8\n\n)\n\nResearch and development tax credits\n\n \n\n \n\n(308\n\n)\n\n \n\n \n\n(327\n\n)\n\nValuation allowance\n\n \n\n \n\n(4,193\n\n)\n\n \n\n \n\n(35\n\n)\n\nEffect of foreign tax rate\n\n \n\n \n\n50\n\n \n\n \n\n \n\n26\n\n \n\nUncertain tax positions\n\n \n\n \n\n140\n\n \n\n \n\n \n\n—\n\n \n\nNondeductible fringe benefits\n\n \n\n \n\n31\n\n \n\n \n\n \n\n30\n\n \n\n162(m)\n\n \n\n \n\n420\n\n \n\n \n\n \n\n105\n\n \n\nForeign withholding tax\n\n \n\n \n\n9\n\n \n\n \n\n \n\n—\n\n \n\nForeign-derived intangible income deduction\n\n \n\n \n\n(61\n\n)\n\n \n\n \n\n(134\n\n)\n\nGlobal intangible low-taxed income\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(20\n\n)\n\nCapital loss expiration\n\n \n\n \n\n4,211\n\n \n\n \n\n \n\n—\n\n \n\nEarnout revaluation\n\n \n\n \n\n(239\n\n)\n\n \n\n \n\n—\n\n \n\nOther\n\n \n\n \n\n20\n\n \n\n \n\n \n\n1\n\n \n\nProvision for income taxes\n\n \n\n$\n\n3,177\n\n \n\n \n\n$\n\n1,018\n\n \n\n \n\n \n\nIn accordance with the adoption of ASU 2023-09, the Company paid cash for income taxes, net of refunds, for the year ended March 31, 2026 as follows:\n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\nU.S. Federal\n\n \n\n$\n\n(144\n\n)\n\nU.S. State and local\n\n \n\n \n\n \n\nNew York\n\n \n\n \n\n(25\n\n)\n\nTexas\n\n \n\n \n\n26\n\n \n\nPennsylvania\n\n \n\n \n\n42\n\n \n\nOther\n\n \n\n \n\n7\n\n \n\nTotal U.S. State and local\n\n \n\n \n\n50\n\n \n\nForeign\n\n \n\n \n\n \n\nChina\n\n \n\n \n\n16\n\n \n\nIndia\n\n \n\n \n\n42\n\n \n\nTotal Foreign\n\n \n\n \n\n58\n\n \n\nTotal cash paid for income taxes, net of refunds\n\n \n\n$\n\n(36\n\n)\n\n \n\n63\n\n \n\n \n\n \n\nThe net deferred income tax asset (liability) recorded in the Consolidated Balance Sheets results from differences between financial statement and tax reporting of income and deductions. A summary of the composition of the Company's net deferred income tax asset (liability) follows:\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nDepreciation\n\n \n\n$\n\n(4,796\n\n)\n\n \n\n$\n\n(3,060\n\n)\n\nAccrued compensation\n\n \n\n \n\n377\n\n \n\n \n\n \n\n322\n\n \n\nGoodwill\n\n \n\n \n\n(1,460\n\n)\n\n \n\n \n\n(1,007\n\n)\n\nPrepaid pension asset\n\n \n\n \n\n(1,461\n\n)\n\n \n\n \n\n(1,278\n\n)\n\nCompensated absences\n\n \n\n \n\n695\n\n \n\n \n\n \n\n641\n\n \n\nInventories\n\n \n\n \n\n669\n\n \n\n \n\n \n\n645\n\n \n\nWarranty liability\n\n \n\n \n\n188\n\n \n\n \n\n \n\n171\n\n \n\nAccrued expenses\n\n \n\n \n\n627\n\n \n\n \n\n \n\n445\n\n \n\nEquity-based compensation\n\n \n\n \n\n633\n\n \n\n \n\n \n\n475\n\n \n\nOperating lease assets\n\n \n\n \n\n(1,574\n\n)\n\n \n\n \n\n(1,460\n\n)\n\nOperating lease liabilities\n\n \n\n \n\n1,686\n\n \n\n \n\n \n\n1,557\n\n \n\nAcquisition costs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n163\n\n \n\nIntangible assets\n\n \n\n \n\n407\n\n \n\n \n\n \n\n71\n\n \n\nNew York State investment tax credit\n\n \n\n \n\n1,086\n\n \n\n \n\n \n\n1,048\n\n \n\nResearch and development cost\n\n \n\n \n\n179\n\n \n\n \n\n \n\n3,612\n\n \n\nResearch and development credit carryforward\n\n \n\n \n\n479\n\n \n\n \n\n \n\n—\n\n \n\nNet operating loss carryforwards\n\n \n\n \n\n2,697\n\n \n\n \n\n \n\n280\n\n \n\nOther\n\n \n\n \n\n(112\n\n)\n\n \n\n \n\n(99\n\n)\n\n \n\n \n\n320\n\n \n\n \n\n \n\n2,526\n\n \n\nLess: Valuation allowance\n\n \n\n \n\n(1,086\n\n)\n\n \n\n \n\n(1,048\n\n)\n\nNet\n\n \n\n$\n\n(766\n\n)\n\n \n\n$\n\n1,478\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPresented as follows:\n\n \n\n \n\n \n\n \n\n \n\n \n\nNoncurrent deferred income tax assets\n\n \n\n$\n\n131\n\n \n\n \n\n$\n\n1,502\n\n \n\nNoncurrent deferred income tax liabilities\n\n \n\n \n\n(897\n\n)\n\n \n\n \n\n(24\n\n)\n\nNet\n\n \n\n$\n\n(766\n\n)\n\n \n\n$\n\n1,478\n\n \n\n \n\nDeferred income taxes include the impact of state investment tax credits of $292, which expire from 2030 to 2040 and state investment tax credits of $794, which have an unlimited carryforward period.\n\nIn assessing the realizability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the consideration of the weight of both positive and negative evidence, management determined that a portion of the deferred tax assets as of March 31, 2026 related to certain state investment tax credits would not be realized and recorded a valuation allowance of $1,086.\n\nThe Company files federal and state income tax returns in several domestic and international jurisdictions. In most tax jurisdictions, returns are subject to examination by the relevant tax authorities for a number of years after the returns have been filed. The Company is subject to U.S. federal examination for tax years 2022 through 2025 and examination in state tax jurisdictions for tax years 2021 through 2025. The Company is subject to examination in the People's Republic of China for tax years 2022 through 2025 and in India for tax years 2022 through 2025. The liability for unrecognized tax benefits was $0 at each of March 31, 2026 and 2025.\n\n \n\nNote 12 – Employee Benefit Plans:\n\nRetirement Plans\n\nThe Company has a qualified defined benefit plan covering Batavia based employees hired prior to January 1, 2003, which is non-contributory. Benefits are based on the employee's years of service and average earnings for the five highest consecutive calendar\n\n64\n\n \n\nyears of compensation in the ten-year period preceding retirement. The Company's funding policy for the plan is to contribute the amount required by the Employee Retirement Income Security Act of 1974, as amended.\n\nThe components of pension cost are:\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nService cost during the period\n\n \n\n$\n\n253\n\n \n\n \n\n$\n\n252\n\n \n\n \n\n$\n\n252\n\n \n\nInterest cost on projected benefit obligation\n\n \n\n \n\n1,295\n\n \n\n \n\n \n\n1,292\n\n \n\n \n\n \n\n1,312\n\n \n\nExpected return on assets\n\n \n\n \n\n(1,688\n\n)\n\n \n\n \n\n(1,778\n\n)\n\n \n\n \n\n(1,851\n\n)\n\nAmortization of:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nActuarial loss\n\n \n\n \n\n851\n\n \n\n \n\n \n\n781\n\n \n\n \n\n \n\n843\n\n \n\nNet pension cost\n\n \n\n$\n\n711\n\n \n\n \n\n$\n\n547\n\n \n\n \n\n$\n\n556\n\n \n\n \n\nThe components of net pension cost other than the service cost component are included in Other expense, net in the Consolidated Statements of Operations.\n\n \n\nThe weighted average actuarial assumptions used to determine net pension cost are:\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDiscount rate\n\n \n\n \n\n5.53\n\n%\n\n \n\n \n\n5.27\n\n%\n\n \n\n \n\n5.03\n\n%\n\nRate of increase in compensation levels\n\n \n\n \n\n3.00\n\n%\n\n \n\n \n\n3.00\n\n%\n\n \n\n \n\n3.00\n\n%\n\nLong-term rate of return on plan assets\n\n \n\n \n\n5.75\n\n%\n\n \n\n \n\n5.75\n\n%\n\n \n\n \n\n5.75\n\n%\n\n \n\nThe expected long-term rate of return is based on the mix of investments that comprise plan assets and external forecasts of future long-term investment returns, historical returns, correlations and market volatilities.\n\nThe Company does not expect to make any contributions to the plan during the fiscal year ended March 31, 2026.\n\nChanges in the Company's benefit obligation, plan assets and funded status for the pension plan are presented below:\n\n \n\n \n\n \n\nYear ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nChange in the benefit obligation\n\n \n\n \n\n \n\n \n\n \n\n \n\nProjected benefit obligation at beginning of year\n\n \n\n$\n\n23,876\n\n \n\n \n\n$\n\n25,042\n\n \n\nService cost\n\n \n\n \n\n253\n\n \n\n \n\n \n\n252\n\n \n\nInterest cost\n\n \n\n \n\n1,295\n\n \n\n \n\n \n\n1,292\n\n \n\nActuarial gain\n\n \n\n \n\n(587\n\n)\n\n \n\n \n\n(384\n\n)\n\nBenefit payments\n\n \n\n \n\n(780\n\n)\n\n \n\n \n\n(868\n\n)\n\nLiability released through annuity purchase\n\n \n\n \n\n(1,056\n\n)\n\n \n\n \n\n(1,458\n\n)\n\nProjected benefit obligation at end of year\n\n \n\n$\n\n23,001\n\n \n\n \n\n$\n\n23,876\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nChange in fair value of plan assets\n\n \n\n \n\n \n\n \n\n \n\n \n\nFair value of plan assets at beginning of year\n\n \n\n$\n\n29,826\n\n \n\n \n\n$\n\n31,438\n\n \n\nActual return on plan assets\n\n \n\n \n\n1,643\n\n \n\n \n\n \n\n714\n\n \n\nBenefit and administrative expense payments\n\n \n\n \n\n(780\n\n)\n\n \n\n \n\n(868\n\n)\n\nAnnuities purchased\n\n \n\n \n\n(1,056\n\n)\n\n \n\n \n\n(1,458\n\n)\n\nFair value of plan assets at end of year\n\n \n\n$\n\n29,633\n\n \n\n \n\n$\n\n29,826\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFunded status\n\n \n\n \n\n \n\n \n\n \n\n \n\nFunded status at end of year\n\n \n\n$\n\n6,633\n\n \n\n \n\n$\n\n5,950\n\n \n\nAmount recognized in the Consolidated Balance Sheets\n\n \n\n$\n\n6,633\n\n \n\n \n\n$\n\n5,950\n\n \n\n \n\n65\n\n \n\nThe weighted average actuarial assumptions used to determine the benefit obligation are:\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nDiscount rate\n\n \n\n \n\n5.67\n\n%\n\n \n\n \n\n5.53\n\n%\n\nRate of increase in compensation levels\n\n \n\n \n\n3.00\n\n%\n\n \n\n \n\n3.00\n\n%\n\n \n\nDuring fiscal 2026 and fiscal 2025, the pension plan released liabilities for vested benefits of certain participants through the purchase of nonparticipating annuity contracts with a third-party insurance company. As a result of these transactions, in fiscal 2026 and fiscal 2025, the projected benefit obligation and plan assets decreased $1,056 and $1,458, respectively. The projected benefit obligation is the actuarial present value of benefits attributable to employee service rendered to date, including the effects of estimated future pay increases. The accumulated benefit obligation reflects the actuarial present value of benefits attributable to employee service rendered to date, but does not include the effects of estimated future pay increases. The accumulated benefit obligation as of March 31, 2026 and 2025 was $21,208 and $21,351, respectively. At March 31, 2026 and 2025, the pension plan was fully funded on an accumulated benefit obligation basis.\n\nAmounts recognized in accumulated other comprehensive loss, net of income tax, consist of:\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nNet actuarial loss\n\n \n\n$\n\n5,680\n\n \n\n \n\n$\n\n6,767\n\n \n\n \n\nThe increase in accumulated other comprehensive loss, net of income tax, consists of:\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nNet actuarial (gain) loss arising during the year\n\n \n\n$\n\n(431\n\n)\n\n \n\n$\n\n522\n\n \n\nAmortization of actuarial loss\n\n \n\n \n\n(656\n\n)\n\n \n\n \n\n(602\n\n)\n\n \n\n \n\n$\n\n(1,087\n\n)\n\n \n\n$\n\n(80\n\n)\n\nThe following benefit payments, which reflect future service, are expected to be paid during the fiscal years ending March 31:\n\n \n\n2027\n\n \n\n$\n\n972\n\n \n\n2028\n\n \n\n \n\n1,042\n\n \n\n2029\n\n \n\n \n\n1,044\n\n \n\n2030\n\n \n\n \n\n1,187\n\n \n\n2031\n\n \n\n \n\n1,506\n\n \n\n2032-2036\n\n \n\n \n\n9,106\n\n \n\nTotal\n\n \n\n$\n\n14,857\n\n \n\n \n\nThe weighted average asset allocation of the plan assets by asset category is as follows:\n\n \n\n \n\n \n\n \n\n \n\n \n\nMarch 31,\n\n \n\nAsset Category\n\n \n\nTarget Allocation\n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nEquity securities\n\n \n\n \n\n20\n\n%\n\n \n\n \n\n21\n\n%\n\n \n\n \n\n22\n\n%\n\nDebt securities\n\n \n\n \n\n80\n\n%\n\n \n\n \n\n79\n\n%\n\n \n\n \n\n78\n\n%\n\n \n\n \n\n \n\n \n\n \n\n \n\n100\n\n%\n\n \n\n \n\n100\n\n%\n\n \n\nThe investment strategy of the plan is to generate a consistent total investment return sufficient to pay present and future plan benefits to retirees, while minimizing the long-term cost to the Company. Target allocations for asset categories are used to earn a reasonable rate of return, provide required liquidity and minimize the risk of large losses. Targets are adjusted when considered necessary to reflect trends and developments within the overall investment environment.\n\n66\n\n \n\nThe fair values of the Company's pension plan assets at March 31, 2026 and 2025, by asset category, are as follows:\n\n \n\n \n\n \n\n \n\n \n\n \n\nFair Value Measurements Using\n\n \n\nAsset Category\n\n \n\nAt\nMarch 31, 2026\n\n \n\n \n\nQuoted prices in\nactive markets for\nidentical assets\n(Level 1)\n\n \n\n \n\nSignificant other\nobservable inputs\n(Level 2)\n\n \n\n \n\nSignificant\nunobservable inputs\n(Level 3)\n\n \n\nCash\n\n \n\n$\n\n104\n\n \n\n \n\n$\n\n104\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nEquity securities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. companies\n\n \n\n \n\n4,245\n\n \n\n \n\n \n\n4,245\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nInternational companies\n\n \n\n \n\n1,950\n\n \n\n \n\n \n\n1,950\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFixed income:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCorporate bond funds\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLong-term\n\n \n\n \n\n23,334\n\n \n\n \n\n \n\n23,334\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n$\n\n29,633\n\n \n\n \n\n$\n\n29,633\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFair Value Measurements Using\n\n \n\nAsset Category\n\n \n\nAt\nMarch 31, 2025\n\n \n\n \n\nQuoted prices in\nactive markets for\nidentical assets\n(Level 1)\n\n \n\n \n\nSignificant other\nobservable inputs\n(Level 2)\n\n \n\n \n\nSignificant\nunobservable inputs\n(Level 3)\n\n \n\nCash\n\n \n\n$\n\n238\n\n \n\n \n\n$\n\n238\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nEquity securities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. companies\n\n \n\n \n\n4,033\n\n \n\n \n\n \n\n4,033\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nInternational companies\n\n \n\n \n\n2,549\n\n \n\n \n\n \n\n2,549\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFixed income:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCorporate bond funds\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLong-term\n\n \n\n \n\n23,006\n\n \n\n \n\n \n\n23,006\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n$\n\n29,826\n\n \n\n \n\n$\n\n29,826\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\nThe fair value of Level 1 pension assets is obtained by reference to the last quoted price of the respective security on the market which it trades. See Note 1 to the Consolidated Financial Statements.\n\nOn February 4, 2003, the Company closed the defined benefit plan to all employees hired on or after January 1, 2003. In place of the defined benefit plan, these employees participate in the Company's domestic defined contribution plan. The Company contributes a fixed percentage of employee compensation to this plan on an annual basis for these employees. The Company's contribution to the defined contribution plan for these employees in fiscal 2026, fiscal 2025 and fiscal 2024 was $1,502, $1,382 and $1,237, respectively.\n\nThe Company has an unfunded Supplemental Executive Retirement Plan (\"SERP\") which provides retirement benefits associated with wages in excess of the legislated qualified plan maximums. Pension expense recorded in fiscal 2026, fiscal 2025, and fiscal 2024 related to this plan was $43, $54 and $54, respectively. The weighted average discount rate used to determine pension expense for this plan was 5.50%, 5.26% and 5.01% for fiscal 2026, fiscal 2025 and fiscal 2024, respectively. The weighted average rate of increase in compensation levels used to develop pension expense for this plan was 3% in each of fiscal 2026, fiscal 2025 and fiscal 2024. At March 31, 2026 and 2025, the projected benefit obligation was $993 and $1,019, respectively, and is included in the caption \"Accrued Pension and Postretirement Benefit Liabilities\" in the Consolidated Balance Sheets. The amounts recognized in accumulated other comprehensive loss, net of income tax, consist of a net actuarial loss of ($89) at March 31, 2026 and 2025, respectively.\n\nThe Company has a domestic defined contribution plan (401(k)) covering substantially all employees. The Company provides matching contributions equal to 100% of the first 3% of an employee's salary deferral and 50% of the next 2% percent of an employee’s salary deferral. Company contributions are immediately vested. Contributions were $2,900 in fiscal 2026, $2,455 in fiscal 2025 and $1,914 in fiscal 2024.\n\n \n\nNote 13 - Stock Compensation Plans:\n\nThe 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\n\n67\n\n \n\nto 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.\n\nThe following grants of restricted stock units (\"RSUs\") and performance stock units (\"PSUs\") were awarded:\n\n \n\n \n\nVest 100% on First\n\n \n\n \n\nVest One-Third Per Year\n\n \n\n \n\nVest 100% on Third\n\n \n\n \n\n \n\n \n\n \n\nAnniversary (1)\n\n \n\n \n\nOver Three-Year Term (1)\n\n \n\n \n\nAnniversary (1)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOfficers and\n\n \n\n \n\nOfficers and\n\n \n\n \n\nTotal Shares\n\nYear Ended March 31,\n\n \n\nDirectors\n\n \n\n \n\nKey Employees\n\n \n\n \n\nKey Employees\n\n \n\n \n\nAwarded\n\n2026\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n     Time Vesting RSUs\n\n \n\n11\n\n \n\n \n\n26\n\n \n\n \n\n \n\n—\n\n \n\n \n\n37\n\n     Performance Vesting PSUs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n42\n\n \n\n \n\n42\n\n2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n     Time Vesting RSUs\n\n \n\n18\n\n \n\n \n\n30\n\n \n\n \n\n \n\n8\n\n \n\n \n\n56\n\n     Performance Vesting PSUs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n62\n\n \n\n \n\n62\n\n2024\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n     Time Vesting RSUs\n\n \n\n38\n\n \n\n \n\n40\n\n \n\n \n\n \n\n—\n\n \n\n \n\n78\n\n     Performance Vesting PSUs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n79\n\n \n\n \n\n79\n\n(1) Subject to the terms of the applicable award.\n\nStock-based compensation cost and the related tax benefits were as follows:\n\n \n\n \n\nStock-Based\n\n \n\n \n\nRelated\n\n \n\nYear Ended March 31,\n\n \n\nCompensation Cost\n\n \n\n \n\nTax Benefits\n\n \n\n2026\n\n \n\n$\n\n1,976\n\n \n\n \n\n$\n\n454\n\n \n\n2025\n\n \n\n \n\n1,828\n\n \n\n \n\n \n\n420\n\n \n\n2024\n\n \n\n \n\n1,188\n\n \n\n \n\n \n\n264\n\n \n\n \n\nAs of March 31, 2026, there was $2,535 of total unrecognized stock-based compensation expense related to non-vested restricted stock. The Company expects to recognize this expense over a weighted average period of 1.85 years.\n\nThe following table summarizes information about the Company's RSUs and PSUs granted during fiscal 2026, fiscal 2025 and fiscal 2024:\n\n \n\n \n\n \n\nNumber of RSUs and PSUs\n\n \n\n \n\nWeighted Average\nGrant Date Fair Value\n\n \n\n \n\nAggregate\nIntrinsic Value\n\n \n\nNon-vested at March 31, 2023\n\n \n\n \n\n305\n\n \n\n \n\n$\n\n11.09\n\n \n\n \n\n \n\n \n\nGranted\n\n \n\n \n\n157\n\n \n\n \n\n \n\n10.95\n\n \n\n \n\n \n\n \n\nVested\n\n \n\n \n\n(68\n\n)\n\n \n\n \n\n11.96\n\n \n\n \n\n \n\n \n\nForfeited\n\n \n\n \n\n(25\n\n)\n\n \n\n \n\n15.29\n\n \n\n \n\n \n\n \n\nNon-vested at March 31, 2024\n\n \n\n \n\n369\n\n \n\n \n\n \n\n11.05\n\n \n\n \n\n \n\n \n\nGranted\n\n \n\n \n\n118\n\n \n\n \n\n \n\n25.75\n\n \n\n \n\n \n\n \n\nVested\n\n \n\n \n\n(125\n\n)\n\n \n\n \n\n28.21\n\n \n\n \n\n \n\n \n\nNon-vested at March 31, 2025\n\n \n\n \n\n362\n\n \n\n \n\n \n\n14.72\n\n \n\n \n\n \n\n \n\nGranted\n\n \n\n \n\n79\n\n \n\n \n\n \n\n42.85\n\n \n\n \n\n \n\n \n\nVested\n\n \n\n \n\n(119\n\n)\n\n \n\n \n\n40.74\n\n \n\n \n\n \n\n \n\nForfeited\n\n \n\n \n\n(60\n\n)\n\n \n\n \n\n8.19\n\n \n\n \n\n \n\n \n\nNon-vested at March 31, 2026\n\n \n\n \n\n262\n\n \n\n \n\n$\n\n25.66\n\n \n\n \n\n$\n\n20,669\n\n \n\nThe Company has an Employee Stock Purchase Plan, as amended (the \"ESPP\"), which allows eligible employees to purchase shares of the Company's common stock at a discount of up to 15% of its fair market value on the lower of the last or first day of the six-month offering period. A total of 400 shares of common stock may be purchased under the ESPP. Issuance of shares, stock-based compensation cost and the related tax benefits were as follows:\n\n \n\n68\n\n \n\n \n\n \n\nIssued from\n\n \n\n \n\nStock-Based\n\n \n\n \n\nRelated\n\n \n\nYear Ended March 31,\n\n \n\nCommon Stock\n\n \n\n \n\nCompensation Cost\n\n \n\n \n\nTax Benefits\n\n \n\n2026\n\n \n\n \n\n21\n\n \n\n \n\n$\n\n155\n\n \n\n \n\n$\n\n36\n\n \n\n2025\n\n \n\n \n\n34\n\n \n\n \n\n \n\n129\n\n \n\n \n\n \n\n30\n\n \n\n2024\n\n \n\n \n\n50\n\n \n\n \n\n \n\n91\n\n \n\n \n\n \n\n20\n\n \n\n \n\nNote 14 – Changes in Accumulated Other Comprehensive Loss:\n\nThe changes in accumulated other comprehensive loss by component for fiscal 2026 and fiscal 2025 are:\n\n \n\n \n\n \n\nPension and Other Postretirement\nBenefit Items\n\n \n\n \n\nForeign\nCurrency\nItems\n\n \n\n \n\nTotal\n\n \n\nBalance at March 31, 2024\n\n \n\n$\n\n(6,776\n\n)\n\n \n\n$\n\n(237\n\n)\n\n \n\n$\n\n(7,013\n\n)\n\nOther comprehensive loss before reclassifications\n\n \n\n \n\n(497\n\n)\n\n \n\n \n\n(79\n\n)\n\n \n\n \n\n(576\n\n)\n\nAmounts reclassified from accumulated other\n  comprehensive loss\n\n \n\n \n\n602\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n602\n\n \n\nNet current-period other comprehensive income (loss)\n\n \n\n \n\n105\n\n \n\n \n\n \n\n(79\n\n)\n\n \n\n \n\n26\n\n \n\nBalance at March 31, 2025\n\n \n\n \n\n(6,671\n\n)\n\n \n\n \n\n(316\n\n)\n\n \n\n \n\n(6,987\n\n)\n\nOther comprehensive loss before reclassifications\n\n \n\n \n\n440\n\n \n\n \n\n \n\n51\n\n \n\n \n\n \n\n491\n\n \n\nAmounts reclassified from accumulated other\n  comprehensive loss\n\n \n\n \n\n647\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n647\n\n \n\nNet current-period other comprehensive income\n\n \n\n \n\n1,087\n\n \n\n \n\n \n\n51\n\n \n\n \n\n \n\n1,138\n\n \n\nBalance at March 31, 2026\n\n \n\n$\n\n(5,584\n\n)\n\n \n\n$\n\n(265\n\n)\n\n \n\n$\n\n(5,849\n\n)\n\n \n\n \n\nThe reclassifications out of accumulated other comprehensive loss by component are as follows:\n\nYear ended March 31, 2026\n\n \n\nDetails about Accumulated Other\nComprehensive Loss Components\n\n \n\nAmounts Reclassified from\nAccumulated Other\nComprehensive Loss\n\n \n\n \n\n \n\nAffected Line Item in the\nConsolidated Statements of\nOperations\n\nPension and other postretirement benefit items:\n\n \n\n \n\n \n\n \n\n \n\n \n\nAmortization of unrecognized prior service\n   benefit\n\n \n\n$\n\n—\n\n \n\n \n\n \n\n \n\nAmortization of actuarial loss\n\n \n\n \n\n(840\n\n)\n\n(1)\n\n \n\n \n\n \n\n \n\n \n\n(840\n\n)\n\n \n\n \n\nIncome before provision for income taxes\n\n \n\n \n\n \n\n(193\n\n)\n\n \n\n \n\nBenefit for income taxes\n\n \n\n \n\n$\n\n(647\n\n)\n\n \n\n \n\nNet income\n\n \n\nYear ended March 31, 2025\n\n \n\nDetails about Accumulated Other\nComprehensive Loss Components\n\n \n\nAmounts Reclassified from\nAccumulated Other\nComprehensive Loss\n\n \n\n \n\n \n\nAffected Line Item in the\nConsolidated Statements of\nOperations\n\nPension and other postretirement benefit items:\n\n \n\n \n\n \n\n \n\n \n\n \n\nAmortization of unrecognized prior service\n   benefit\n\n \n\n$\n\n—\n\n \n\n \n\n \n\n \n\nAmortization of actuarial loss\n\n \n\n \n\n(781\n\n)\n\n(1)\n\n \n\n \n\n \n\n \n\n \n\n(781\n\n)\n\n \n\n \n\nIncome before provision for income taxes\n\n \n\n \n\n \n\n(179\n\n)\n\n \n\n \n\nBenefit for income taxes\n\n \n\n \n\n$\n\n(602\n\n)\n\n \n\n \n\nNet income\n\n \n\n(1)\nThese accumulated other comprehensive loss components are included within the computation of net periodic pension and other postretirement benefit costs. See Note 12.\n\n \n\n69\n\n \n\nNote 15 - Segment Information:\n\nThe 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.\n\nThe following table provides our results as a reconciliation from consolidated Net income to our consolidated Adjusted EBITDA:\n\n \n\n \n\nYears Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nNet income\n\n \n\n$\n\n12,500\n\n \n\n \n\n$\n\n12,230\n\n \n\n \n\n$\n\n4,556\n\n \n\n Acquisition & integration expense (income), net\n\n \n\n \n\n1,305\n\n \n\n \n\n \n\n(1,170\n\n)\n\n \n\n \n\n432\n\n \n\n Equity-based compensation\n\n \n\n \n\n2,131\n\n \n\n \n\n \n\n1,957\n\n \n\n \n\n \n\n1,279\n\n \n\n ERP implementation costs\n\n \n\n \n\n213\n\n \n\n \n\n \n\n882\n\n \n\n \n\n \n\n241\n\n \n\n Debt amendment costs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n781\n\n \n\n Employee Retention Tax Credit, net\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(702\n\n)\n\n Net interest (income) expense\n\n \n\n \n\n(257\n\n)\n\n \n\n \n\n(583\n\n)\n\n \n\n \n\n248\n\n \n\n Income tax expense\n\n \n\n \n\n2,260\n\n \n\n \n\n \n\n3,177\n\n \n\n \n\n \n\n1,018\n\n \n\n Depreciation & amortization\n\n \n\n \n\n7,843\n\n \n\n \n\n \n\n5,936\n\n \n\n \n\n \n\n5,432\n\n \n\nAdjusted EBITDA\n\n \n\n$\n\n25,995\n\n \n\n \n\n$\n\n22,429\n\n \n\n \n\n$\n\n13,285\n\n \n\n \n\nIn fiscal 2026, the Company had two customers whose sales amounted to 19% and 16% of total consolidated net sales. In fiscal 2025, the Company had two customers whose sales amounted to 17% and 13% of total consolidated net sales. In fiscal 2024, the Company had two customers whose sales amounted to 16% and 15% of total consolidated net sales. One customer representing such sales was the same customer in fiscal 2026, fiscal 2025 and fiscal 2024.\n\n \n\nNote 16 – Purchase of Treasury Stock:\n\nOn January 29, 2015, the Company’s Board of Directors authorized a stock repurchase program. Under the stock repurchase program the Company is permitted to repurchase up to $18,000 of its common stock either in the open market or through privately negotiated transactions. Cash on hand has been used to fund all stock repurchases under the program. No shares were purchased under this program in fiscal 2026, fiscal 2025 or fiscal 2024. Under the terms of our credit agreement with Wells Fargo, the Company cannot repurchase shares of its common stock if the Company is in default or if such repurchase would result in an event of default under the credit agreement.\n\n \n\nNote 17 – Commitments and Contingencies:\n\nThe 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 Company’s 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.\n\nDuring 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 misconduct by employees. The other misconduct was over a period of four years, was not deemed to be material, and was isolated to a few employees. All involved employees have been terminated or are no longer with the Company and the Company has implemented remedial actions, including strengthening its compliance program\n\n70\n\n \n\nand internal controls. As a result of the investigation, during the third quarter of fiscal 2024, the statutory auditor and bookkeeper of GIPL tendered their resignations and new firms were appointed. The Company has voluntarily reported the findings of its investigation to the appropriate authorities in India, the U.S. Department of Justice, and the Securities and Exchange Commission and will continue to cooperate with those authorities. Although the resolutions of these matters are inherently uncertain, we do not believe any remaining impact will be material to the Company’s overall consolidated results of operations, financial position, or cash flows.\n\nAs of March 31, 2026, the Company was subject to the claims noted above, as well as other potential claims that have arisen in the ordinary course of business. Although the outcome of the lawsuits, legal proceedings or potential claims to which the Company is, or may become, a party to cannot be determined and an estimate of the reasonably possible loss or range of loss cannot be made for the majority of the claims, management does not believe that the outcomes, either individually or in the aggregate, will have a material adverse effect on the Company’s results of operations, financial position or cash flows.\n\n \n\nNote 18 - Subsequent Events:\n\nOn April 14, 2026, the Company entered into a Securities Purchase Agreement with certain accounts advised by T. Rowe Price Investment Management, Inc. pursuant 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.\n\n \n\n71"}