Graham (NYSE: GHM) reported Q3 EPS of $0.39, $0.07 better than the analyst estimate of $0.32. Revenue for the quarter came in at $33.6 million versus the consensus estimate of $31.9 million.

James R. Lines, Graham's President and Chief Executive Officer, commented, "Execution in fiscal 2015 continues to be strong, as we convert the robust order volume won during fiscal 2014 and earlier in this fiscal year. Our expanded facilities in Batavia are now being utilized, allowing us to generate solid throughput and gross profit expansion, and, by leveraging our SG&A, drive bottom line results."

Orders during the third quarter of fiscal 2015 were $22.6 million, down $0.9 million, or 4%, from $23.5 million in the third quarter of fiscal 2014 and down sequentially from $35.4 million in fiscal 2015's second quarter.

Orders from the refining and other commercial and industrial markets both increased significantly in the current quarter when compared with the third quarter of fiscal 2014. Orders from the refining industry increased to $7.6 million compared with $3 million in the prior-year's period, while orders from other commercial and industrial markets, increased to $5.7 million compared with $2.6 million in the same period last year. Orders from the chemical/petrochemical industry saw a 33% reduction in the fiscal 2015 third quarter compared with the prior-year's third quarter, and orders from the power industry saw a 74% decrease. When compared with the trailing second quarter of fiscal 2015, the chemical/petrochemical industry and other commercial and industrial markets experienced 16% and 20% order growth, respectively, while orders from the refining and power industries saw decreased order levels.

Orders from U.S. customers represented 55%, or $12.4 million, of total orders received during the third quarter of fiscal 2015, while orders from international markets accounted for $10.2 million. Orders received during the first nine months of fiscal 2015 were 51% from the U.S. Graham expects that orders will continue to be geographically diverse and variable between quarters and, in the long term, will be relatively balanced between domestic and international markets.

Graham's backlog was $103.8 million at December 31, 2014, down from $114.8 million at September 30, 2014. The backlog at the end of the third quarter reflects industry diversity, with approximately 37% for refinery projects, 23% for chemical/petrochemical projects, 11% for power projects, including nuclear, 21% for U.S. Navy projects and 8% for all other industries served by Graham. Consistent with the end of the trailing fiscal 2015 second quarter, $7.8 million of backlog at December 31, 2014 was on hold pending the end-user's analysis of final project design. Graham expects that this hold will be released during calendar 2015, with shipment expected 18 to 30 months subsequent to release.

Approximately 70% to 75% of orders currently in backlog are expected to be converted to sales within the next 12 months, 15% to 20% are expected to be converted within the next 12 to 24 months, and 5% to 10% are expected to be converted beyond 24 months.

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