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GRAHAM CORP. PROFIT UP 30% DESPITE SLUMP IN FAR EAST SALES

Graham Corp., continuing its struggle against weakness in its major Far Eastern markets, said Thursday that its third-quarter profits rose by 30 percent from last year's depressed levels.

Graham, which said last week that it is cutting 14 office jobs, including 12 at its Batavia headquarters in response to the weak Asian markets and a sharp drop in new orders, managed to increase its profits, even though its earnings remained at a low level by historic standards.

The manufacturer of vacuum and heat transfer equipment said its profits rose to $403,000, or 25 cents per share, compared with $309,000, or 19 cents per share, a year ago. The final three months of the year typically are Graham's strongest. The company's sales rose by 19 percent to $14.2 million during the quarter that ended on Dec. 31, compared with $11.9 million the year before.

But the economic turmoil in Asia is taking a toll on the number of new orders that Graham is taking in, which will put a damper on the company's future sales and earnings.

Graham booked $8.54 million in new orders during the third quarter, which was down 29 percent from $11.95 million a year ago. That trend, which has been in effect for the last year, has caused the company's backlog of orders to shrink by 39 percent to $17.17 million at the end of December, compared with $28.2 million at the end of March. That backlog also is down 25 percent from $23 million at the end of September.

Graham said the cost-cutting efforts, which also include closing its sales office in Clifton, N.J., and consolidating its sales operations in Batavia, will save the company an amount equal to about 50 cents per share each year.

Alvaro Cadena, Graham's president and chief executive officer, said the company also is stepping up its sales efforts in the power generation market, which he described as one of the firm's more promising markets at this time.

For the first nine months of the fiscal year, Graham's profits fell by 16 percent to $1.42 million, or 87 cents per share, from $1.69 million, or $1 per share, a year earlier. Sales rose by 6 percent to $40.8 million from $38.4 million.

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