Graham Corp. expects to add jobs at its Batavia factory after winning more than $20 million in orders for condensers that will be used in new power plants, the company said Wednesday.
Graham officials would not say how many jobs they expect to add, but they did indicate that they expect to win orders for even more condensers that could maintain a steady flow of work for the next four years.
"It means the potential for additional employment at our facility," said William A. Smith, Graham's vice president and general counsel. He declined to estimate how many jobs would be added until the company outlines its plans to the nearly 300 workers at its Batavia factory today.
With orders in hand for nine of Graham's big steam surface condensers, the company is showing the first signs that it will be able to cash in on a surge in power plant construction across the country and help pull it out of a two-year slump that has cut deeply into sales and depressed profits.
Executives at the vacuum and heat transfer equipment maker have been predicting that the surge in power plant construction resulting from spiking electricity prices and periodic shortages would develop into a growing source of business for Graham over the next five to 10 years.
Investors reacted to the announcement by pushing Graham's stock up by nearly 30 percent, rising $2.50 to $10.90. Graham's stock, which had been down 17 percent this year before Tuesday, now is up nearly 8 percent for the year.
The condenser orders, which came from a U.S. company that Graham did not want to identify, are one of the biggest individual projects in the company's history, Smith said.
In all, Graham has received orders for nine condensers since June, including seven that came in during the summer and two more that were booked this month. The company already has made and shipped four condensers.
The condensers are expected to be shipped through January 2003, and Smith said the company expects to receive further orders at the current pace for units that would be delivered in 2003, 2004 and 2005.
Al Cadena, Graham's president and chief executive officer, said the company is structuring its operations so it can continue to serve its traditional customer base while it takes on the additional work from the condenser orders.
The orders have pushed Graham's backlog of orders up by 9 percent to an all-time high of $41.6 million at the end of September.
"That's almost a year's worth of work," said Brad McAdam, an analyst for the Bullfinch Funds' Western New York Series mutual fund, which owns some Graham shares.
The condensers increased the company's flow of new orders by 52 percent during the second quarter to $17.55 million, up from $11.5 million a year ago.
Graham's profits soared by 36 percent to $349,000, or 21 cents per share, from $267,000, or 16 cents per share, a year ago. The company's sales rose by 20 percent to $14.1 million during the quarter that ended Sept. 30, compared with $11.7 million a year earlier.