Graham Corp. is cutting its work force by 10 percent as the slump in its key energy markets cuts into the Batavia heat transfer equipment maker’s sales and profits.
Graham said it eliminated most of the jobs, including between 21 and 23 positions in Batavia, during June in a move that is expected to save the company about $2.7 million a year at a time when its first-quarter profits were barely better than break-even and its sales dropped by 19 percent.
“A challenging environment persists in our energy markets,” said James R. Lines, Graham’s president and CEO. “We believe this recent cost reduction action will improve near-term operating performance.”
Graham, which reduced its work force by 10 percent during the spring of 2015 as its energy markets weakened, eliminated another 40 jobs during June and July as low energy prices continued to persist, leading to fewer projects to upgrade refineries or make improvements at chemical and petrochemical plants that require the compressors and other equipment that the company makes.
Graham now has about 260 workers at its Batavia headquarters and factory, down from 318 before the first round of job cuts last year.
In all, the latest job cuts reduced Graham’s total employment to 329 people, including employees at its nuclear power equipment business in Michigan. Some of the Michigan job cuts took place this month, a company spokeswoman said Friday. About half of the job cuts involved production workers, with the other half affecting engineering and administrative positions, Lines said during a conference call Friday.
Graham said it earned $85,000, or 1 cent per share, during the quarter that ended in June, down from $2.4 million, or 23 cents per share, a year earlier.
The company’s sales fell to $22.4 million from $27.6 million as revenues from projects in the refining and chemical markets continued to decline as energy prices have fallen.
Excluding $400,000 in after-tax restructuring charges stemming from the job cuts, Graham said it earned $500,000, or 5 cents per share.
For the fiscal year, Graham said it expects its sales to range between $80 million and $95 million, compared with $90 million a year ago.