CTL is an emerging technology used to liquefy coal and upgrade the resulting output into petroleum-based products. As worldwide oil reserves continue to decline, interest in CTL technology is growing as coal is believed to be one of the richest and widely distributed fossil deposits on earth.
Graham Corp said clean technology will be used to convert coal to methanol which will then be further converted into ethylene. Ethylene is used in downstream facilities in the production of various plastic and chemical products, from tires and carpets to detergents and clothing.
Jim Lines, Graham’s President and CEO, said: “We believe there are an abundance of opportunities in production facilities that will rely on emerging technology, such as CTL, gas-to-liquid, biodiesel and ethanol plants. The end-users for these projects, regardless of location, require high-quality, reliable equipment, and the Graham brand provides the value that they want.
“Our early guidance for fiscal year 2009 revenue growth is in the 10% to 15% range, with higher probability of being at the upper end of the range. Our pipeline of potential projects continues to remain strong in both the domestic and international refinery and petrochemical markets while we see increasing opportunities in a broader variety of industries as evidenced by this win.
“We ended our third quarter with a record backlog of $63 million and have another quarter of new order opportunities which we intend to use to push the business beyond our current expectations, if possible. We believe that the steps we have taken to improve our productivity, expand capacity and selectively outsource projects will also allow us to achieve our projected profitability criteria and gross margins in the 35% or potentially greater range.
The company expects to benefit greatly from the worldwide boom in the oil refining and petrochemical markets. It expects the forces driving the worldwide demand growth for energy to continue into the next decade.
“Naturally, other equipment suppliers will attempt to move into these markets. We are in a leadership position in these industries and intend to remain there in the future,” said Mr Lines.
For the quarter ended December 2007, Graham said sales grew 42.2% while diluted earnings per share surged more than 500% when compared to the same period the previous year. Sales were $20.6 million and net income was $3.8 million, or $0.74 per diluted share, representing an 18.4% net margin.
The company expects full fiscal year 2008 revenue to be in the upper end of its previously announced expected range of $80 to $85 million, gross margin to be in the upper 30% range.
With world-renowned engineering expertise in vacuum and heat transfer technology, Graham Corporation is a designer, manufacturer and global supplier of ejectors, pumps, condensers, vacuum systems and heat exchangers.
The principal markets for Graham’s equipment, sold either as components or complete system solutions, are the petrochemical, oil refining and electric power generation industries, including cogeneration and geothermal plants.