Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See ~~the definitions~~definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of ~~February 1,~~July 26, 2013, there were outstanding ~~10,002,292~~10,033,905 shares of the registrant’s common stock, par value $.10 per share.

As of ~~December 31, 2012~~June 30, 2013 and March 31, ~~2012~~2013 and for the ~~Three and Nine-Month~~Three-Month Periods


	Three Months Ended December 31,						Nine Months Ended December 31,
	2012			2011			2012			2011			Three Months Ended June 30,
	(Amounts in thousands, except per share data)												2013			2012
													(Amounts in thousands, except per share data)
Net sales	$	25,633		$	24,329		$	74,068		$	82,936		$	28,256		$	22,533
Cost of products sold		18,505			17,856			52,791			55,357			18,241			16,297
Cost of goods sold - amortization		—			11			—			120

Total cost of goods sold		18,505			17,867			52,791			55,477

Gross profit		7,128			6,462			21,277			27,459			10,015			6,236

Other expenses and income:
Selling, general and administrative		3,131			3,764			11,538			11,754			4,346			4,028
Selling, general and administrative - amortization		57			56			170			163
Selling, general and administrative—amortization														57			56
Interest income		(13	)		(12	)		(38	)		(48	)		(11	)		(11	)
Interest expense		19			55			(271	)		260			5			80

Total other expenses and income		3,194			3,863			11,399			12,129			4,397			4,153

Income before provision for income taxes		3,934			2,599			9,878			15,330			5,618			2,083
Provision for income taxes		887			959			2,826			5,206			1,810			693

Net income		3,047			1,640			7,052			10,124			3,808			1,390
Retained earnings at beginning of period		77,989			72,711			74,383			64,623			84,632			74,383
Dividends		(200	)		(198	)		(599	)		(594	)		(301	)		(200	)

Retained earnings at end of period	$	80,836		$	74,153		$	80,836		$	74,153		$	88,139		$	75,573


Per share data:
Per share data
Basic:
Net income	$	.30		$	.16		$	.70		$	1.02		$	0.38		$	0.14


Diluted:
Net income	$	.30		$	.16		$	.70		$	1.01		$	0.38		$	0.14


Weighted average common shares outstanding:
Basic:		10,034			9,955			10,023			9,954
Diluted:		10,057			9,991			10,046			9,991

Basic														10,057			10,002
Diluted														10,086			10,028
Dividends declared per share	$	.02		$	.02		$	.06		$	.06		$	0.03		$	0.02


	Three Months Ended December 31,				Nine Months Ended December 31,
	2012		2011		2012		2011		Three Months Ended June 30,
	(Amounts in thousands)								2013		2012
									(Amounts in thousands, except per share data)
Net income	$	3,047	$	1,640	$	7,052	$	10,124	$	3,808	$	1,390


Other comprehensive income:
Foreign currency translation adjustment		34		15		22		71		7		(15	)
Defined benefit pension and other postretirement plans net of tax of $78 and $35 for the three months ended December 31, 2012 and 2011, respectively, and $235 and $105 for the nine months ended December 31, 2012 and 2011, respectively		144		62		431		188

Defined benefit pension and other postretirement plans net of income tax of $78 and $78, respectively										143		143

Total other comprehensive income		178		77		453		259		150		128


Total comprehensive income	$	3,225	$	1,717	$	7,505	$	10,383	$	3,958	$	1,518


							June 30,			March 31,
	December 31, 2012			March 31, 2012			2013			2013
	(Amounts in thousands, except per share data)						(Amounts in thousands, except per share data)
Assets
Current assets:
Cash and cash equivalents	$	28,110		$	25,189		$	25,693		$	24,194
Investments		26,997			16,499			27,499			27,498
Trade accounts receivable, net of allowances ($72 and $43 at December 31 and March 31, 2012, respectively)		11,389			11,593
Trade accounts receivable, net of allowances ($37 and $33 at June 30 and March 31, 2013, respectively)								17,236			9,440
Unbilled revenue		7,655			12,667			10,128			13,113
Inventories		7,385			6,047			9,518			11,171
Prepaid expenses and other current assets		412			467			1,421			783
Income taxes receivable		3,126			4,479			1,007			2,635
Deferred income tax asset		91			37			126			69

Total current assets		85,165			76,978			92,628			88,903
Property, plant and equipment, net		13,101			13,453			13,100			13,288
Prepaid pension asset		2,813			2,238			2,547			2,349
Goodwill		6,938			6,938			6,938			6,938
Permits		10,300			10,300			10,300			10,300
Other intangible assets, net		4,833			4,968			4,743			4,788
Other assets		188			102			11			167

Total assets	$	123,338		$	114,977		$	130,267		$	126,733


Liabilities and stockholders’ equity
Current liabilities:
Current portion of capital lease obligations	$	88		$	85		$	86		$	87
Accounts payable		6,125			6,303			7,714			9,429
Accrued compensation		4,482			4,652			4,574			5,018
Accrued expenses and other current liabilities		2,581			3,707			3,727			3,051
Customer deposits		9,353			7,257			7,801			6,919
Deferred income tax liability		2,347			2,244			374			373

Total current liabilities		24,976			24,248			24,276			24,877
Capital lease obligations		150			203			107			127
Accrued compensation		298			293			314			308
Deferred income tax liability		7,473			7,404			7,298			7,131
Accrued pension liability		228			229			238			227
Accrued postretirement benefits		922			895			932			923
Other long-term liabilities		92			85			147			145

Total liabilities		34,139			33,357			33,312			33,738


Commitments and contingencies (Note 12)

Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $1.00 par value -
Authorized, 500 shares
Common stock, $.10 par value -
Authorized, 25,500 shares
Issued, 10,329 and 10,297 shares at December 31 and March 31, 2012, respectively		1,033			1,030
Issued, 10,361 and 10,331 shares at June 30 and March 31, 2013, respectively								1,036			1,033
Capital in excess of par value		18,338			17,745			18,896			18,596
Retained earnings		80,836			74,383			88,139			84,632
Accumulated other comprehensive loss		(7,707	)		(8,160	)		(7,883	)		(8,033	)
Treasury stock (336 and 346 shares at December 31 and March 31, 2012, respectively)		(3,301	)		(3,378	)
Treasury stock, 327 and 327 shares at June 30 and March 31, 2013, respectively								(3,233	)		(3,233	)

Total stockholders’ equity		89,199			81,620			96,955			92,995

Total liabilities and stockholders’ equity	$	123,338		$	114,977		$	130,267		$	126,733


	Nine Months Ended December 31,
	2012			2011
	(Amounts in thousands)						Three Months Ended June 30,
							2013			2012
Operating activities:
Net income	$	7,052		$	10,124		$	3,808		$	1,390
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		1,390			1,177			493			464
Amortization		170			283			57			56
Amortization of unrecognized prior service cost and actuarial losses		666			293			221			222
Discount accretion on investments		(10	)		(4	)		(3	)		(2	)
Stock-based compensation expense		463			465			195			171
Loss on disposal of property, plant and equipment		8			5
Loss on disposal or sale of property, plant and equipment								—			3
Deferred income taxes		(259	)		192			183			(99	)
(Increase) decrease in operating assets:
Accounts receivable		210			(1,657	)		(7,900	)		2,039
Unbilled revenue		5,017			1,642			2,992			5,012
Inventories		(1,335	)		2,264			1,843			(580	)
Prepaid expenses and other current and non-current assets		74			(224	)		(645	)		(95	)
Prepaid pension asset		(575	)		(624	)		(198	)		(192	)
Increase (decrease) in operating liabilities:
Accounts payable		(257	)		(3,665	)		(1,731	)		(340	)
Accrued compensation, accrued expenses and other current and non-current liabilities		(1,138	)		678			234			(274	)
Customer deposits		2,087			(4,893	)		797			(3,087	)
Income taxes receivable		1,354			(2,196	)
Income taxes payable/receivable								1,628			783
Long-term portion of accrued compensation, accrued pension liability and accrued postretirement benefits		31			54			26			6

Net cash provided by operating activities		14,948			3,914			2,000			5,477


Investing activities:
Purchase of property, plant and equipment		(971	)		(2,621	)		(295	)		(300	)
Proceeds from disposal of property, plant and equipment		4			4
Purchase of investments		(60,488	)		(16,398	)		(22,999	)		(20,996	)
Redemption of investments at maturity		50,000			37,920			23,000			15,000
Acquisition of Energy Steel & Supply Co.		—			384

Net cash (used) provided by investing activities		(11,455	)		19,289

Net cash used by investing activities								(294	)		(6,296	)

Financing activities:
Principal repayments on capital lease obligations		(61	)		(57	)		(21	)		(21	)
Issuance of common stock		55			378			48			—
Dividends paid		(599	)		(594	)		(301	)		(200	)
Purchase of treasury stock		—			(221	)
Excess tax (deficiency) benefit on stock awards		(2	)		197
Excess tax benefit (deficiency) on stock awards								61			(11	)

Net cash used by financing activities		(607	)		(297	)		(213	)		(232	)

Effect of exchange rate changes on cash		35			47			6			(11	)

Net increase in cash and cash equivalents		2,921			22,953
Cash and cash equivalents at beginning of period		25,189			19,565
Net increase (decrease) in cash and cash equivalents								1,499			(1,062	)
Cash and cash equivalents at beginning of year								24,194			25,189

Cash and cash equivalents at end of period	$	28,110		$	42,518		$	25,693		$	24,127

Graham Corporation’s (the “Company’s”) Condensed Consolidated Financial Statements include (i) its wholly-owned foreign subsidiary located in China and (ii) its wholly-owned domestic subsidiary located in Lapeer, Michigan. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, each as promulgated by the Securities and Exchange ~~Commission (“SEC”).~~Commission. The Company’s Condensed Consolidated Financial Statements do not include all information and notes required by GAAP for complete financial statements. The unaudited Condensed Consolidated Balance Sheet as of March 31, ~~2012~~2013 presented herein was derived from the Company’s audited Consolidated Balance Sheet as of March 31, ~~2012.~~2013. For additional information, please refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, ~~2012~~2013 (“fiscal ~~2012”~~2013”). In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair presentation, have been included in the Company’s Condensed Consolidated Financial Statements.

The Company’s results of operations and cash flows for the three ~~and nine~~ months ended ~~December 31, 2012~~June 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, ~~2013~~2014 (“fiscal ~~2013”~~2014”).

On December 14, 2010, the Company completed its acquisition of Energy Steel & Supply Co. (“Energy Steel”), a nuclear code accredited fabrication and specialty machining company located in Lapeer, Michigan dedicated primarily to the nuclear power industry. The transaction was accounted for under the acquisition method of accounting and the purchase price was $17,899 in cash, subject to the adjustments described below.

The purchase agreement included a contingent earn out, which ranged from $0 to $2,000, dependant upon Energy Steel’s earnings performance in calendar years 2011 and 2012. In the fourth quarter of fiscal 2012, $1,000 of the earn out was paid. Energy Steel did not achieve the earnings performance requirements for calendar year 2012. Therefore, in the third quarter of fiscal 2013, the liability for the remaining contingent earn out of $975 was reversed. The Condensed Consolidated Statement of Operations for each of the three and nine months ended December 31, 2012 includes income of $975 in selling, general and administrative expense related to this adjustment.

During fiscal 2012, the Company received $384 from the seller due to a reduction in purchase price based upon the final determination of the working capital acquired in accordance with the purchase agreement. The Company’s Condensed Consolidated Statement of Cash Flows for the nine months ended December 31, 2011 reflects this adjustment.

The Company recognizes revenue on all contracts with a planned manufacturing process in excess of four weeks (which approximates 575 direct labor hours) using the percentage-of-completion method. The majority of the Company’s revenue is recognized under this methodology. The percentage-of-completion method is determined by comparing actual labor incurred to a specific date to management’s estimate of the total labor to be incurred on each contract. Contracts in progress are reviewed monthly, and sales and earnings are adjusted in current accounting periods based on revisions in the contract value and estimated costs at completion. Losses on contracts are recognized immediately when evident. There is no reserve for credit losses related to unbilled revenue recorded for contracts accounted for on the percentage-of-completion method. Any reserve for credit losses related to unbilled revenue is recorded as a reduction to revenue.

Revenue on contracts not accounted for using the percentage-of-completion method is recognized utilizing the completed contract method. The majority of the Company’s contracts (as opposed to revenue) have a planned manufacturing process of less than four weeks and the results reported under this method do not vary materially from the percentage-of-completion

method. The Company recognizes revenue and all related costs on these contracts upon substantial completion or shipment to the customer. Substantial completion is consistently defined as at least 95% complete with regard to direct labor hours. Customer acceptance is generally required throughout the construction process and the Company has no further material obligations under its contracts after the revenue is recognized.

Investments consist solely of fixed-income debt securities issued by the U.S. Treasury with original maturities of greater than three months and less than one year. All investments are classified as held-to-maturity, as the Company has the intent and ability to hold the securities to maturity. The investments are stated at amortized cost which approximates fair value. All investments held by the Company at ~~December 31, 2012~~June 30, 2013 are scheduled to mature ~~prior to April 25,~~on or before September 26, 2013.

Inventories are stated at the lower of cost or market, using the average cost method. For contracts accounted for on the completed contract method, progress payments received are netted against inventory to the extent the payment is less than the inventory balance relating to the applicable contract. Progress payments that are in excess of the corresponding inventory balance are presented as customer deposits in the Condensed Consolidated Balance Sheets. Unbilled revenue in the Condensed Consolidated Balance Sheets represents revenue recognized that has not been billed to customers on contracts accounted for on the percentage-of-completion method. For contracts accounted for on the ~~percentage-of–completion~~percentage-of-completion method, progress payments are netted against unbilled revenue to the extent the payment is less than the unbilled revenue for the applicable contract. Progress payments exceeding unbilled revenue are netted against inventory to the extent the payment is less than or equal to the inventory balance relating to the applicable contract, and the excess is presented as customer deposits in the Condensed Consolidated Balance Sheets.


	December 31, 2012		March 31, 2012
					June 30, 2013		March 31, 2013
Raw materials and supplies	$	2,940	$	2,366	$	2,737	$	2,865
Work in process		12,556		12,405		12,356		13,470
Finished products		623		587		524		572

		16,119		15,358		15,617		16,907
Less - progress payments		8,734		9,311
Less—progress payments						6,099		5,736

Total	$	7,385	$	6,047	$	9,518	$	11,171


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
At December 31, 2012
At June 30, 2013
Intangibles subject to amortization:
Backlog	$	170	$	170	$	—	$	170	$	170	$	—
Customer relationships		2,700		367		2,333		2,700		457		2,243

	$	2,870	$	537	$	2,333
							$	2,870	$	627	$	2,243

Intangibles not subject to amortization:
Permits	$	10,300	$	—	$	10,300	$	10,300	$	—	$	10,300
Tradename		2,500		—		2,500		2,500		—		2,500

	$	12,800	$	—	$	12,800	$	12,800	$	—	$	12,800


At March 31, 2012
At March 31, 2013
Intangibles subject to amortization:
Backlog	$	170	$	170	$	—	$	170	$	170	$	—
Customer relationships		2,700		232		2,468		2,700		412		2,288

	$	2,870	$	402	$	2,468
							$	2,870	$	582	$	2,288

Intangibles not subject to amortization:
Permits	$	10,300	$	—	$	10,300	$	10,300	$	—	$	10,300
Tradename		2,500		—		2,500		2,500		—		2,500

	$	12,800	$	—	$	12,800	$	12,800	$	—	$	12,800

Intangible assets are amortized on a straight line basis over ~~their~~the estimated useful lives. Intangible amortization expense for ~~each of~~ the ~~three-month periods ended December 31, 2012 and 2011 was $45. Intangible amortization expense for the nine~~three months ended ~~December 31,~~June 30, 2013 and 2012 was $45 and ~~2011 was $135 and $206,~~$45, respectively. As of ~~December 31, 2012,~~June 30, 2013, amortization expense is estimated to be ~~$45~~$135 for the remainder of fiscal ~~2013~~2014 and $180 in each of the fiscal ~~2014, fiscal~~years ending March 31, 2015, ~~fiscal~~ 2016, 2017 and ~~fiscal 2017.~~

The Amended and Restated 2000 Graham Corporation Incentive Plan to Increase Shareholder Value provides for the issuance of up to 1,375 shares of common stock in connection with grants of incentive stock options, non-qualified stock options, stock awards and performance awards to officers, key employees and outside directors; provided, however, that no more than 250 shares of common stock may be used for awards other than stock options. Stock options may be granted at prices not less than the fair market value at the date of grant and expire no later than ten years after the date of grant.

~~There were no stock~~Stock option awards granted in the three months ended ~~December 31,~~June 30, 2013 and 2012 were 0 and ~~2011,~~49, respectively. ~~Stock~~The stock option awards granted in the ~~nine months ended December 31, 2012 and 2011 were 49 and 9, respectively. The stock option awards~~first quarter of fiscal 2013 vest 33¹/₃% per year over a three-year ~~term. All stock options~~term and have a term of ten years from their grant date.

Restricted stock awards granted in the three-month periods ended ~~December 31,~~June 30, 2013 and 2012 were 32 and ~~2011 were 0 and 4,~~26, respectively. ~~Restricted~~Performance vested restricted stock awards ~~granted in the nine-month periods ended December 31, 2012~~of 14 and ~~2011 were 26 and 32, respectively. Performance-vested restricted stock awards~~18 granted to officers in fiscal ~~2013~~2014 and fiscal ~~2012~~2013, respectively, vest 100% on the third anniversary of the grant date, subject to the satisfaction of the performance metrics ~~established~~ for the applicable three-year period. ~~Time-vested~~Time vested restricted stock awards of 12 granted to officers and key employees in fiscal ~~2012~~2014 vest ~~50% on the second anniversary of the grant date and 50% on the fourth anniversary of the grant date. Time-vested~~33¹/₃% per year over a three-year period. Time vested restricted stock awards of 6 and 8 granted to directors in fiscal ~~2013~~2014 and fiscal ~~2012~~2013, respectively, vest 100% on the first anniversary of the grant date.

During the three months ended ~~December 31,~~June 30, 2013 and 2012, ~~and 2011,~~ the Company recognized stock-based compensation costs related to stock option and restricted stock awards of ~~$131~~$180 and ~~$131,~~$156, respectively. The income tax benefit recognized related to stock-based compensation was ~~$46~~$63 and ~~$47~~$55 for the three months ended ~~December 31,~~June 30, 2013 and 2012, and 2011, respectively. During the nine months ended December 31, 2012 and 2011, the Company recognized stock-based compensation costs related to stock option and restricted stock awards of $423 and $421, respectively. The income tax benefit recognized related to stock-based compensation was $149 and $150 for the nine months ended December 31, 2012 and 2011, respectively.

The Company has an Employee Stock Purchase Plan (the “ESPP”), which allows eligible employees to purchase shares of the Company’s common stock on the last day of a six-month offering period at a purchase price equal to the lesser of ~~85%~~85 percent of the fair market value of the common stock on either the first day or the last day of the offering period. A total of 200 shares of common stock may be purchased under the ESPP. During the three months ended ~~December 31,~~June 30, 2013 and 2012, ~~and 2011,~~ the Company recognized stock-based compensation costs of ~~$13~~$15 and ~~$14,~~$15, respectively, related to the ESPP and $5 and $5, respectively, of related tax benefits. During the nine months ended December 31, 2012 and 2011, the Company recognized stock-based compensation costs of $40 and $44, respectively, related to the ESPP and $13 and $15, respectively, of related tax benefits.

Basic income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Common shares outstanding include share equivalent units, which are contingently issuable shares. Diluted income per share is calculated by dividing net income by the weighted average number of common shares outstanding and, when applicable, potential common shares outstanding during the period. A reconciliation of the numerators and denominators of basic and diluted income per share is presented below:


	Three Months Ended December 31,				Nine Months Ended December 31,				Three Months Ended June 30,
	2012		2011		2012		2011		2013		2012
Basic income per share

Numerator:
Net income	$	3,047	$	1,640	$	7,052	$	10,124	$	3,808	$	1,390


Denominator:
Weighted common shares outstanding		9,991		9,913		9,980		9,902		10,014		9,960
Share equivalent units (“SEUs”)		43		42		43		52		43		42

Weighted average common shares and SEUs		10,034		9,955		10,023		9,954		10,057		10,002


Basic income per share	$	.30	$	.16	$	.70	$	1.02	$	0.38	$	0.14

Diluted income per share
Numerator:
Net income									$	3,808	$	1,390
Denominator:
Weighted average shares and SEUs outstanding										10,057		10,002
Stock options outstanding										29		26

Weighted average common and potential common shares outstanding										10,086		10,028

Diluted income per share									$	0.38	$	0.14

Numerator:
Net income	$	3,047	$	1,640	$	7,052	$	10,124


Denominator:
Weighted average shares and SEUs outstanding		10,034		9,955		10,023		9,954
Stock options outstanding		23		35		23		36
Contingently issuable SEUs		—		1		—		1

Weighted average common and potential common shares outstanding		10,057		9,991		10,046		9,991


Diluted income per share	$	.30	$	.16	$	.70	$	1.01

Options to purchase a total of 7114 and 2423 shares of common stock were outstanding at ~~December~~June 30, 2013 and 2012, ~~and 2011,~~ respectively, but were not included in the above computation of diluted income per share given their exercise prices as they would be anti-dilutive upon issuance.

The reconciliation of the changes in the product warranty liability is as follows:


	Three Months Ended December 31,						Nine Months Ended December 31,
	2012			2011			2012			2011			Three Months Ended June 30,
													2013			2012
Balance at beginning of period	$	174		$	239		$	215		$	202		$	408		$	215
(Income) expense for product warranties		65			(5	)		73			67			(20	)		11
Product warranty claims paid		(79	)		(7	)		(128	)		(42	)		(57	)		(32	)

Balance at end of period	$	160		$	227		$	160		$	227		$	331		$	194

The income of $5$20 for product warranties in the three months ended ~~December 31, 2011,~~June 30, 2013 resulted from the reversal of provisions made that were no longer required due to lower claims experience.

The product warranty liability is included in the line item “Accrued expenses and other current liabilities” in the Condensed Consolidated Balance Sheets.

Interest paid was ~~$55~~$3 and $9$3 for the ~~nine-month periods~~three months ended ~~December 31,~~June 30, 2013 and 2012, ~~and 2011,~~ respectively. In addition, income taxes (refunded) paid for the ~~nine~~three months ended ~~December 31,~~June 30, 2013 and 2012 were $(61) and ~~2011 were $949 and $7,000,~~$29, respectively.

During the ~~nine~~three months ended ~~December 31,~~June 30, 2013 and 2012, ~~and 2011,~~ respectively, stock option awards were exercised and restricted stock awards vested. In connection with such stock option exercises and ~~restricted stock award~~ vesting, the related income tax benefit realized exceeded (reduced) the tax benefit that had been recorded pertaining to the compensation cost recognized by ~~$(2)~~$61 and ~~$197,~~$(11), respectively, for such periods. This excess tax benefit (deficiency) has been separately reported under “Financing activities” in the Condensed Consolidated Statements of Cash Flows.

At ~~December 31,~~June 30, 2013 and 2012, ~~and 2011,~~ respectively, there were ~~$68~~$10 and ~~$16~~$10 of capital purchases that were recorded in accounts payable and are not included in the caption “Purchase of property, plant and equipment” in the Condensed Consolidated Statements of Cash Flows. ~~In the nine months ended December 31, 2012 and 2011, capital expenditures totaling $11 and $205, respectively, were financed through the issuance of capital leases.~~


	Three Months Ended December 31,						Nine Months Ended December 31,
	2012			2011			2012			2011			Three Months Ended June 30,
													2013			2012
Service cost	$	136		$	115		$	408		$	345		$	144		$	136
Interest cost		357			355			1,070			1,065			340			357
Expected returns on assets		(684	)		(678	)		(2,053	)		(2,034	)
Expected return on assets														(682	)		(684	)
Amortization of:
Unrecognized prior service cost		1			1			3			3			1			1
Actuarial loss		252			129			758			387			250			252

Net pension expense (income)	$	62		$	(78	)	$	186		$	(234	)
Net pension cost													$	53		$	62

The Company made no contributions to its defined benefit pension plan during the ~~nine~~three months ended ~~December 31, 2012~~June 30, 2013 and does not expect to make any contributions to the plan for the balance of fiscal ~~2013.~~2014.


	Three Months Ended December 31,						Nine Months Ended December 31,
	2012			2011			2012			2011			Three Months Ended June 30,
													2013			2012
Service cost	$	—		$	—		$	—		$	—		$	—		$	—
Interest cost		9			11			28			33			8			9
Amortization of prior service cost		(41	)		(41	)		(124	)		(124	)
Amortization of prior service benefit														(41	)		(41	)
Amortization of actuarial loss		10			9			29			27			11			10

Net postretirement benefit income	$	(22	)	$	(21	)	$	(67	)	$	(64	)	$	(22	)	$	(22	)

The Company paid benefits of $2$0 related to its postretirement benefit plan during the ~~nine~~three months ended ~~December 31, 2012.~~June 30, 2013. The Company expects to pay benefits of approximately ~~$102~~$107 for the balance of fiscal ~~2013.~~2014.

The Company has been named as a defendant in certain lawsuits alleging personal injury from exposure to asbestos allegedly contained in products made by the Company. The Company is a co-defendant with numerous other defendants in these lawsuits and intends to vigorously defend itself against these claims. The claims are similar to previous asbestos suits that named the Company as defendant, which either were dismissed when it was shown that the Company had not supplied products to the plaintiffs’ places of work or were settled for immaterial amounts.

As of ~~December 31, 2012,~~June 30, 2013, the Company was subject to the claims noted above, as well as other legal proceedings and potential claims that have arisen in the ordinary course of business.

Although the outcome of the lawsuits to which the Company is a party cannot be determined and an estimate of the reasonably possible loss or range of loss cannot be made, management does not believe that the outcomes, either individually or in the aggregate, will have a material effect on the Company’s results of operations, financial position or cash flows.

The Company files federal and state income tax returns in several domestic and international jurisdictions. In most tax jurisdictions, returns are subject to examination by the relevant tax authorities for a number of years after the returns have been filed. During fiscal 2012, the Company reached a resolution with the U.S. Internal Revenue Service (the “IRS”) with regard to the research and development tax credits claimed during tax years 2006 through 2008. As a result of such resolution, the tax credits claimed during such years were reduced by approximately 40% and interest was assessed on the underpayment of tax. ~~In the first quarter of~~During fiscal 2013, the Company ~~also~~ reached a resolution with the IRS that reduced the research and development tax credits claimed ~~by the Company~~ during tax years 2009 and 2010 by approximately 30%.

~~The cumulative tax benefit related~~ In addition, in fiscal 2013, the Company paid all settlement amounts to the ~~research and development tax credit~~IRS for ~~the~~ tax years ~~ended March 31, 1999~~2006 through ~~March 31, 2010 was $2,244.~~ 2010.

The liability for unrecognized tax benefits related to the tax position for this period was $824 at March 31, 2012. During the nine months ended December 31, 2012, the Company paid the settlement amount to the IRS thereby reducing this liability for unrecognized tax benefits to $0. The liability for unrecognized tax benefits related to the research and development tax ~~credit for the tax years ended March 31, 2011~~credits was $134 and ~~2012 was $84 and $81~~$134 at ~~December 31, 2012~~June 30, 2013 and March 31, ~~2012,~~2013, respectively. The Company had one additional unrecognized tax benefit of $882 as of March 31, 2012 which was resolved with the IRS during the ~~six~~three months ended ~~September~~June 30, 2012, resulting in a reversal of the liability.

The Company is subject to examination in federal and state tax jurisdictions for tax years 2011 through 2012 and tax years 2008 through 2012, respectively. The Company is subject to examination in its international tax jurisdiction for tax years 2010 through 2012. It is the Company’s policy to recognize any interest related to uncertain tax positions in interest expense and any penalties related to uncertain tax positions in selling, general and administrative expense. During the three months ended ~~December 31,~~June 30, 2013 and 2012, the Company recorded $2 for interest related to its uncertain tax positions. During the three months ended September 30, 2012, the Company reversed provisions that had been made in previous periods for interest related to its uncertain tax positions due to lower interest assessments by the IRS than expected. Including this reversal, the Company recorded $(323) for interest related to its uncertain tax positions during the nine months ended December 31, 2012. During the three and nine months ended December 31, 2011, the Company recorded $21 and $62, respectively, for interest related to its uncertain tax positions. No penalties related to uncertain tax positions were recorded in the ~~three or nine-month~~three-month periods ended ~~December 31, 2012~~June 30, 2013 or ~~2011.~~2012.

The changes in accumulated other comprehensive loss by component for the three months ended June 30, 2013 are as follows:

The reclassifications out of accumulated other comprehensive loss by component for the three months ended June 30, 2013 are as follows:

In the normal course of business, management evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), the ~~SEC,~~Securities and Exchange Commission, the Emerging Issues Task Force, the American Institute of Certified Public Accountants or any other authoritative accounting body to determine the potential impact they may have on the Company’s consolidated financial statements.

In ~~September 2011,~~July 2012, the FASB amended its guidance related to ~~the~~ periodic testing of ~~goodwill~~indefinite-lived intangible assets for impairment. ~~This~~The amended guidance ~~allows companies~~is intended to ~~first~~reduce cost and complexity by providing an entity with the option to make a qualitative assessment about the likelihood that an indefinite-lived intangible asset is impaired to determine whether it should perform a quantitative impairment test. The guidance also enhances the consistency of impairment testing among long-lived asset categories by permitting an entity to assess qualitative factors to determine whether ~~the existence of events or circumstances leads to a determination that~~ it is ~~more likely than~~necessary to calculate the asset’s fair value when testing

an indefinite-lived intangible asset for impairment, which is equivalent to the impairment testing requirements for other long-lived assets. In accordance with the guidance, an entity will have an option not ~~that~~to calculate annually the fair value of ~~a reporting unit is less than its carrying amount. If~~an indefinite-lived intangible asset if the entity determines that ~~this threshold~~it is not ~~met, then performing~~more-likely-than-not that the ~~two-step impairment test may not be necessary.~~asset is impaired. The provisions of the amended guidance ~~were~~are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The Company will perform its annual impairment testing of indefinite-lived intangible assets pursuant to this guidance during the third quarter of fiscal 2014. The adoption of the amended guidance is not expected to have a material impact on our consolidated financial statements.

In February 2013, the FASB issued guidance related to the disclosure of amounts reclassified out of accumulated other comprehensive income. This guidance adds new disclosure requirements either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income (“AOCI”) based on its source and the income statement line items affected by the reclassification. This guidance gives companies the flexibility to present the information either in the notes or parenthetically on the face of the financial statements provided that all of the required information is presented in a single location. This guidance is effective prospectively for annual and interim reporting periods beginning after December 15, 2012. The Company inadopted this guidance during the first quarter of fiscal ~~2013. This guidance~~2014 and such adoption did not have a material impact on the Company’s ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements as it only changed the disclosures surrounding AOCI (See Note 13).

Management does not expect any other recently issued accounting pronouncements, which have not already been adopted, to have a material impact on the Company’s consolidated financial statements.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a global business that designs, manufactures and sells ~~custom-engineered ejectors,~~equipment that is critical to the energy industry which includes the oil refining, petrochemical, cogeneration, nuclear and alternative power markets. With world-renowned engineering expertise in vacuum ~~systems, condensers, liquid ring pump packages~~ and heat ~~exchangers to the refining~~transfer technology and ~~petrochemical industries, and a~~extensive nuclear code accredited ~~supplier~~fabrication and specialty machining experience, we design and manufacture custom-engineered ejectors, pumps, surface condensers and vacuum systems as well as supplies and components for utilization both inside the reactor vessel and outside the containment vessel of ~~components and raw materials to the~~ nuclear power ~~generating market.~~facilities. Our equipment is also used in ~~critical applications in~~nuclear propulsion power systems for the ~~petrochemical, oil refining~~defense industry and ~~electric power generation industries, including nuclear, cogeneration and geothermal plants. Our equipment~~ can ~~also~~ be found ~~in ethanol, biodiesel, coal-to-liquids and gas-to-liquids industries, as well as~~ in other diverse applications such as metal refining, pulp and paper processing, ~~shipbuilding (e.g., the nuclear propulsion program of the U.S. Navy),~~ water heating, refrigeration, desalination, ~~soap manufacturing,~~ food processing, ~~pharmaceuticals, and~~pharmaceutical, heating, ventilating and air conditioning.

Our corporate ~~offices are~~headquarters is located in Batavia, New York and we have production facilities in both Batavia, New York and at our wholly-owned subsidiary, Energy Steel & Supply Co. (“Energy Steel”), located in Lapeer, Michigan. We also have a wholly-owned foreign subsidiary, Graham Vacuum and Heat Transfer Technology (Suzhou) Co., Ltd. (“GVHTT”), located in Suzhou, China, which supports sales orders from China and ~~other parts of Asia and~~ provides engineering support and supervision of subcontracted fabrication.

Our current fiscal year (which we refer to as “fiscal 2014”) ends March 31, 2014.

Highlights for the three ~~and nine~~ months ended ~~December 31, 2012 (the fiscal year ending March 31,~~June 30, 2013 ~~is referred to as “fiscal 2013”)~~ include:

This report and other documents we file with the Securities and Exchange Commission include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results implied by the forward-looking statements. Such factors include, but are not limited to, the risks and uncertainties identified by us under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for fiscal ~~2012.~~2013.

Forward-looking statements may also include, but are not limited to, statements about:

Forward-looking statements are usually accompanied by words such as “anticipate,” “believe,” “estimate,” “may,” “might,” “intend,” “interest,” “appear,” “expect,” ~~“plan”~~“suggest,” “plan,” “potential,” and similar expressions. Actual results could differ materially from historical results or those implied by the forward-looking statements contained in this report.

Undue reliance should not be placed on our forward-looking statements. Except as required by law, we undertake no obligation to update or announce any revisions to forward-looking statements contained in this report, whether as a result of new information, future events or otherwise.

We continued to see strong bidding activity during the first quarter of fiscal 2014. Bidding activity is a leading indicator of the direction and health of our markets. We believe ~~current market conditions are more positive than they have been in~~ the ~~past few years. The~~ business environment ~~in our markets appears~~is continuing to ~~continue to be improving~~improve and ~~we believe~~ that our customers ~~now may be~~are becoming more inclined to ~~move forward with~~procure the equipment needed for their projects. This supports our belief that ~~our~~the oil refining, petrochemical and related markets we serve remain in the early stages of a business recovery. The current activity level within our pipeline continues to be more positive than in the past few years.

We believe the quantity, magnitude and quality of our bidding activity supports this view of improved market conditions. We also believe that delayed purchase decisions by our customers are more due to their timing than conditions of our markets.

~~Near-term~~following demand trends that ~~we believe~~ are ~~affecting~~influencing our customers’ investments include:

including ethylene, methanol, ammonia and urea facilities. In addition, existing petrochemical facilities are evaluating restarting idled process units or debottlenecking existing operations to increase throughput. We currently have a number of these projects in our pipeline and have begun to add new orders into backlog associated with the North American petrochemical/chemical markets. We historically have had strong market share within U.S. petrochemical facilities. Lower natural gas cost has also made the U.S. production of ethane, which is a by-product of natural gas production, favorably competitive with naphtha, which is a by-product of crude oil refining, as a feedstock for ethylene production. Proposed ethylene capacity expansion and re-opening of mothballed facilities in the U.S., as well as downstream products, are being discussed by petrochemical producers for the first time in well over a decade. We believe investment in U.S. petrochemical markets could be significant over the next several years.

We expect that the consequences of ~~these near-term~~the trends ~~and specifically projected expansion~~described above will drive revenue growth for us. As we look forward at margin potential in ~~petrochemical and oil refining outside of North America, primarily~~this cycle, we expect growth in ~~the growing Asian and South American~~emerging markets ~~will~~to result in ~~continued~~increased pressure on ~~our~~ pricing and gross margins, as these markets historically provided lower margins than North American refining markets. ~~A potential offset to margin pressure from international markets may come from~~We do believe investments in new petrochemical capacity built in North America ~~and~~may provide a partial offset to this margin pressure. Adding these pieces together, we believe peak margins in the ~~timing of such investments.~~current cycle may be somewhat less than the previous cycle, which was driven by the domestic refining market.

Because of continued global economic and financial uncertainty and the risk associated with growth in emerging economies, we also expect that we will continue to experience volatility in our order pattern. We continue to expect our new order levels to remain ~~volatile. We expect that this volatility will result~~volatile, resulting in both relatively strong and weak ~~quarters over~~quarters. As the ~~next several quarters. Quarterly~~chart below indicates, quarterly orders can vary significantly as indicated in the following chart which depicts our quarterly order levels for the first, second and third quarters of fiscal 2013 as well as the four quarters of each of fiscal 2012 and the fiscal year ending March 31, 2011, which we refer to as “fiscal 2011”.significantly.

~~We believe that looking~~Looking at our order level in any one quarter does not provide an accurate indication of our future expectations or performance. Rather, we believe that looking at our orders and backlog over a ~~one-to two-year~~trailing twelve-month period provides a better measure of our business. A good example of this is the first quarter of fiscal 2014, where 87% of total orders came from the U.S. We believe ~~looking at trailing twelve month~~that the increase in domestic orders during our first quarter resulted from the timing of projects which closed in the current quarter. While the first quarter had a strong predominance of domestic orders, it is premature to suggest a trend or shift toward the U.S. market. However, it is possible that fiscal 2014 could see a heavier weighting of domestic orders than the past few years. We will discuss this further as the fiscal year continues.

Our quarterly order levels ~~provides a better view~~and trailing twelve-month order levels for the first quarter of fiscal 2014, and the ~~direction~~four quarters of ~~our business. In~~fiscal 2013 and fiscal year ended March 31, 2012 (which we refer to as “fiscal 2012”), respectively, are set forth in the near-term, we expect to continue to see smaller value projects than what we had seen during the last expansion cycle. This will require more orders for us to achieve a similar revenue level and will adversely impact our ability to realize margin gains through volume leverage.chart below.

~~Expect Stronger~~Expected International Growth in Refining and Chemical Processing ~~while~~and Domestic Growth ~~is Expected to be~~ in Chemical Processing, Nuclear Power and U.S. Navy Projects ~~and Petrochemical Industries~~

We expect growth in ~~the~~ refining ~~and chemical processing markets~~capacity to be driven by emerging markets. We also expect incremental investments in the domestic market for the existing refining facilities. Investment in the chemical and petrochemical processing markets ~~as well~~is expected to be split between North America and the international market. We believe our revenue opportunities in chemicals and petrochemicals will be balanced between the domestic and international markets. This compares with the previous cycle, which was almost exclusively driven by ~~U.S. petrochemical growth, should it occur.~~the international markets. We have also expanded our addressable markets ~~through~~with the ~~acquisition~~expansion of ~~Energy Steel~~our capabilities in the power market and our focus on the U.S. Navy nuclear propulsion projects. ~~We believe our revenue opportunities during the near term will be equivalent between the domestic and international markets.~~

Over the long-term, we expect our customers’ markets to regain their strength and, while remaining cyclical, continue to grow. We believe the long-term trends remain strong and that the drivers of future growth include:

We believe that all of the above factors offer us long-term growth opportunities to meet our customers’ expected capital project needs. In addition, we believe we can continue to grow our less cyclical smaller product lines and aftermarket businesses.

Our domestic sales, as a percentage of aggregate product sales, were 53% in the first ~~nine months~~quarter of fiscal ~~2013 were 53%.~~2014. This is ~~similar to~~compared with 56% in the same quarter last year. In fiscal 2012 ~~where~~and fiscal 2013, domestic sales ~~had~~ increased to 54% and 53%, respectively. We expect domestic sales to continue to comprise slightly more than half of our total sales, ~~up from 45% in each~~however, if domestic orders continue to be strong over the remaining part of fiscal ~~2010 and 2011. The~~2014, the percentage of domestic business could increase in

~~domestic sales has been due to our acquisition of Energy Steel in late fiscal 2011, which primarily has a domestic customer base, and~~compared with the conversion of the U.S. Navy order. The U.S. Navy activity represents our production of surface condensers for the CVN-79 Gerald R. Ford Class nuclear carrier, an order that was won in the third quarter of our fiscal year ended March 31, 2010.past two years.

For an understanding of the significant factors that influenced our performance, the following discussion should be read in conjunction with our condensed consolidated financial statements and the notes to our condensed consolidated financial statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q.

The following table summarizes our results of operations for the periods indicated:


	Three Months Ended December 31,				Nine Months Ended December 31,
	2012		2011		2012		2011		Three Months Ended June 30,
									2013		2012
Net sales	$	25,633	$	24,329	$	74,068	$	82,936	$	28,256	$	22,533
Net income	$	3,047	$	1,640	$	7,052	$	10,124	$	3,808	$	1,390
Diluted income per share	$	0.30	$	0.16	$	0.70	$	1.01	$	0.38	$	0.14
Total assets	$	123,338	$	119,850	$	123,338	$	119,850	$	130,267	$	112,749

The ~~Third~~First Quarter ~~and~~of Fiscal 2014 Compared With the First ~~Nine Months~~Quarter of Fiscal 2013 ~~Compared With the Third Quarter and First Nine Months of Fiscal 2012~~

Sales for the ~~third~~first quarter of fiscal ~~2013~~2014 were ~~$25,633,~~$28,256, a 5%25% increase as compared with sales of ~~$24,329~~$22,533 for the ~~third~~first quarter of fiscal ~~2012.~~2013. The increase in the current quarter’s sales was driven by ~~improved pricing~~higher volume in the refining and ~~added volume from increased subcontracting.~~power markets. International sales ~~were up $3,830~~year-over-year increased $3,343, or 34%, due to an increase of $3,821 in Asia from the refining market in China. International sales accounted for 47% and 44% of total sales for the first quarter of fiscal 2014 and fiscal 2013, respectively. Domestic sales increased $2,380, or 19%, in the first quarter of fiscal 2014 compared with the ~~third~~first quarter of fiscal ~~2012, primarily driven by increased~~2013. Fluctuations in sales ~~to the Middle East. Domestic sales decreased $2,526 in the third quarter~~among products and geographic locations can vary measurably from quarter-to-quarter based on timing and magnitude of ~~fiscal 2013 compared with the same quarter in fiscal 2012.~~projects. Sales in the three months ended ~~December 31, 2012~~June 30, 2013 were ~~43%~~45% to the refining industry, ~~25% to the chemical and petrochemical industries,~~ 16% ~~to the power industry, including the nuclear market and 16% to other commercial and industrial applications. Sales in the three months ended December 31, 2011 were 31% to the refining industry, 19%~~ to the chemical and petrochemical industries, 27% to the power industry, including the nuclear market and ~~23%~~12% to other commercial and industrial applications. ~~Fluctuations~~Sales in ~~sales among markets, products~~the three months ended June 30, 2012 were 23% to the refining industry, 25% to the chemical and ~~geographic locations can vary measurably from quarter-to-quarter based on, among~~petrochemical industries, 23% to the power industry, and 29% to other ~~things, timing~~commercial and ~~magnitude of projects. See “Fiscal 2013 and Near Term Market Conditions” above.~~industrial applications. For additional information on ~~anticipated~~ future sales and our markets, see “Orders and Backlog” below.

Sales for the first nine months of fiscal 2013 were $74,068, a decrease of 11% compared with sales of $82,936 for the first nine months of fiscal 2012. The decrease in year-to-date sales was primarily due to lower international sales, pricing and volume. International sales accounted for 47% and 48% of total sales for the first nine months of fiscal 2013 and fiscal 2012, respectively. International sales year-over-year decreased $5,185, or 13%. In the first nine months of fiscal 2013, sales to the Middle East declined $3,115. The remaining sales decrease came from Asia and South America. Domestic sales decreased $3,683 or 9%, in the nine months ended December 31, 2012 compared with the nine months ended December 31, 2011. Sales in the

first nine months of fiscal 2013 were 30% to the refining industry, 28% to the chemical and petrochemical industries, 21% to the power industry, including the nuclear market, and 21% to other commercial and industrial applications. Sales in the first nine months of fiscal 2012 were 38% to the refining industry, 14% to the chemical and petrochemical industries, 27% to the power industry, including the nuclear market, and 21% to other commercial and industrial applications.

Our gross profit margin for the third quarter of fiscal 2013 was 28% compared with 27% for the third quarter of fiscal 2012. Gross profit for the third quarter of fiscal 2013 increased to $7,128 from $6,462, or 10%, compared with the same period in fiscal 2012. Gross profit margin and dollars in the third quarter increased primarily due to improved pricing on projects won a year into the recovery of our markets.

Our gross profit margin for the first ~~nine months~~quarter of fiscal ~~2013~~2014 was ~~29%~~35% compared with ~~33%~~28% for the first ~~nine months~~quarter of fiscal ~~2012.~~2013. Gross profit dollars for the first ~~nine months~~quarter of fiscal ~~2013 decreased 23% to $21,277,~~2014 increased 61% compared with ~~the same period in fiscal 2012, which had gross profit of $27,459. The decrease in gross profit margin and dollars had occurred in the first two quarters of~~ fiscal 2013, ~~compared with the same period of fiscal 2012.~~to $10,015 from $6,236. Gross profit percentage and dollars ~~decreased in the nine-month period~~increased primarily due to ~~lower~~higher volume and capacity utilization, ~~as well as the~~a greater level of short cycle sales that reflected stronger pricing and conversion of projects during the first ~~two quarters~~quarter of fiscal ~~2013,~~2014 which had ~~less~~more favorable pricing compared with the projects converted in the first two quarters of fiscal 2012. Certain projects which converted in the first half of the prior fiscal year were won during the prior market peak, when pricing was strong. This trend reversed itself for the third quarter of fiscal 2013 compared with the same period in the prior year, but the increase in gross profit margin and dollars in the current quarter was not sufficient to offset the decrease experienced in the first half of the year.2013.

Selling, general and administrative (“SG&A”) expense in the three month period ended December 31, 2012 decreased $632, or 17% compared with the same period of the prior year. This decrease was due primarily to the reversal of a $975 reserve related to the expected value of the earn out from the Energy Steel acquisition.

The Energy Steel acquisition provided for a potential earn out to the seller of up to $1,000 per year for each of the first two full calendar years (calendar years 2011 and 2012) that we owned Energy Steel. The first year, calendar year 2011, the earn out was achieved and paid to the seller in January 2012. The earn out for the second year, calendar year 2012, had been partly reserved for at the time of acquisition with the remaining charges added subsequent to the acquisition. However, due to lower order volume levels experienced in calendar year 2012 and project timing, the Energy Steel earn out criteria was not achieved. As a result, the reserve of $975 was adjusted to $0, and $975 was recorded as a reduction of selling, general and administrative expenses ~~in the third quarter.~~

Selling, general and administrative (“SG&A”) expense in the nine month period ended December 31, 2012 decreased $209, or 2%, compared with the same periods of the prior year. Excluding the impact of the reversal of the earn out reserve described above, SG&A increased 9% in the three month period and 6% in the nine month period ended December 31, 2012, compared to the same periods in the prior year.

The increase for both the three and nine-month periods was due to increased headcount, as we prepare for the anticipated continued recovery in our markets, offset by certain costs related to lower sales volume.

~~SG&A expense~~ as a percent of sales for the ~~three and nine-month~~three-month periods ended ~~December 31,~~June 30, 2013 and 2012 ~~was 12%~~were 16% and ~~16%~~18%, respectively. ~~Excluding~~SG&A expenses in the ~~impact~~first quarter of ~~the earn out reserve reversal noted above, SG&A expense as a percentage~~fiscal 2014 were $4,403, an increase of ~~sales was 16% and 17%~~$319, or 8%, ~~respectively. This~~ compared with ~~16% and 14%, respectively for~~ the ~~same periods~~first quarter of ~~the prior year.~~fiscal 2013 SG&A ~~expense as a percent~~ of ~~sales increased,~~$4,084. The increase in SG&A expenses was primarily due to ~~increased commissions, headcount~~compensation related costs and ~~lower comparable sales.~~sales commissions, particularly in Asia, driven by higher volume.

Interest income ~~was $13 and $38~~ for the three month-periods ended June 30, 2013 and ~~nine-month periods ended December 31,~~ 2012 ~~compared with $12~~was $11 and ~~$48 for the same periods ended December 31, 2011. The low level~~$11, respectively. Low levels of interest income ~~relative to~~resulted from the ~~amount of cash invested reflects the persistent~~continuing low level of interest rates on ~~money market funds and~~ short term U.S. government securities ~~in which we invest net cash available from operations.~~and money market rates.

Interest expense was ~~$19 and $(271)~~$5 for the ~~three and nine-month periods~~quarter ended ~~December 31, 2012, compared with $55 and $260~~June 30, 2013, down from $80 for the ~~same periods~~quarter ended ~~December 31, 2011. It is~~June 30, 2012. The decrease was due to a reduction in interest recorded relating to our ~~policy to recognize any interest related to~~ uncertain tax ~~positions~~positions.

The tax rate in ~~interest expense. In~~ the ~~second~~first quarter of fiscal 2013, due to lower than expected assessments by the IRS, we reversed provisions that had been made in earlier periods for interest related to previously uncertain tax positions. See Note 13 of the notes to our unaudited condensed consolidated financial statements included in Part I, Item I, of this Quarterly Report on Form 10-Q.

~~We project our effective tax rate in fiscal 2013 will be between 29% and 30%. The tax rate used to reflect income tax expense~~2014 was 32%, which compares with 33% in the ~~current quarter was 23%, and the tax rate~~same period last year.

Net income for the first ~~nine~~three months of fiscal 2014 compared with the first three months of fiscal 2013 was 29%. The lower tax rate realized in the third quarter was related to the reversal of the Energy Steel earn out reserve discussed above, which was not tax affected, since it was a purchase price adjustment. Excluding this reversal, the effective tax rate in each of the three$3,808 and nine-month periods ended December 31, 2012 would have been 32%. The actual annual effective tax rate for fiscal 2012 was 37%, which included a charge of $374 related to the resolution of an IRS audit related to research and development tax credits taken in tax years 2006 through 2008. Excluding this charge, the effective tax rate in fiscal 2012 was 34%.

Net income for the three and nine months ended December 31, 2012 was $3,047 and $7,052, respectively, compared with $1,640 and $10,124, respectively, for the same periods in the prior fiscal year. Excluding the reversal of the earn out reserve, net income for the three and nine months ended December 31, 2012 was $2,072 and $6,077,$1,390, respectively. Income per diluted share ~~in fiscal 2013~~ was ~~$0.30~~$0.38 and ~~$0.70~~$0.14, for the three and nine-month periods, compared with $0.16 and $1.01 for the same three and nine-month periods of fiscal 2012. Excluding the reversal of the earn out reserve, income per diluted share was $0.21 and $0.61 for the three and nine-month periods of fiscal 2013.respective periods.

The following discussion should be read in conjunction with our ~~unaudited condensed consolidated statements~~Condensed Consolidated Statements of ~~cash flows included in Part I, Item 1 of this Quarterly Report on Form 10-Q:~~Cash Flows:


	December 31, 2012		March 31, 2012		June 30,		March 31,
					2013		2013
Cash and investments	$	55,107	$	41,688	$	53,192	$	51,692
Working capital		60,189		52,730		68,352		64,026
Working capital ratio⁽¹⁾		3.4		3.2		3.8		3.6

Net cash generated by operating activities for the first ~~nine months~~quarter of fiscal ~~2013~~2014 was ~~$14,948,~~$2,000, compared with ~~$3,914~~$5,477 of cash generated ~~by operating activities~~ for the first ~~nine months~~quarter of fiscal ~~2012.~~2013. The ~~increase~~decrease in cash generated was due to ~~improvements in unbilled revenue, customer deposits, accounts payable,~~higher levels of accounts receivable in the first quarter of fiscal 2014, driven by the timing of progress payment invoice schedules and ~~income taxes payable,~~higher sales. This was partly offset by higher net income, lower inventory and ~~lower net income.~~higher customer deposits.

Dividend payments and capital expenditures in the first ~~nine months~~quarter of fiscal ~~2013~~2014 were ~~$599~~$301 and ~~$971,~~$295, respectively, compared with ~~$594~~$200 and ~~$2,621,~~$300, respectively, for the first ~~nine months~~quarter of fiscal ~~2012.~~2013. The higher dividend payment was due to the 50% increase in dividends per share announced in January 2013.

Capital expenditures for fiscal ~~2013~~2014 are expected to be between ~~$1,500~~approximately $3,500 and ~~$2,000.~~$4,500. We may exceed this range subject to market conditions. Approximately ~~70%~~75%—85% of our fiscal ~~2013~~2014 capital expenditures are expected to be for machinery and equipment, with the remaining amounts anticipated to be used for information technology and other items.

Cash and investments were ~~$55,107~~$53,192 on ~~December 31, 2012~~June 30, 2013 compared with ~~$41,688~~$51,692 on March 31, ~~2012,~~2013, up ~~$13,419,~~$1,500, or ~~32%~~3%.

We invest net cash generated from operations in excess of cash held for near-term needs in either a money market account or in U.S. government instruments, generally with maturity periods of up to 180 days. Our money market account is used to securitize our outstanding letters of credit and allows us to pay a lower cost on those letters of credit.

Our revolving credit facility with Bank of America, N.A. provides us with a line of credit of $25,000, including letters of credit and bank guarantees. In addition, ~~our credit facility~~the agreement allows us to increase the line of credit, at our discretion, up to another $25,000, for total availability of $50,000. Borrowings under our credit facility are secured by all of our assets. Letters of credit outstanding under our credit facility on ~~December 31, 2012~~June 30, 2013 and March 31, ~~2012~~2013 were ~~$11,274~~$7,694 and ~~$9,920,~~$12,354, respectively. There were no other amounts outstanding on our credit facility at ~~December 31, 2012~~June 30, 2013 and March 31, ~~2012.~~2013. Our borrowing rate as of ~~December 31, 2012~~June 30 and March 31, ~~2012~~2013 was Bank of America’s prime rate, or 3.25%. Availability under the line of credit was ~~$13,726~~$17,306 at ~~December 31, 2012.~~June 30, 2013. We believe that cash generated from operations, combined with our investments and available financing capacity under our credit facility, will be adequate to meet our cash needs for the immediate future.

Orders for the three-month period ended ~~December 31, 2012~~June 30, 2013 were ~~$24,579,~~$32,783 compared with ~~$21,933~~$19,721 for the same period last year, an increase of ~~12%~~66%. ~~For the three months ended December 31, 2012, orders increased in Canada by $5,864, largely in connection with oil sands opportunities, offsetting an order level decrease of $5,349 in the U.S.~~ Orders represent written communications received from customers requesting us to supply products and services.

During the first nine months of fiscal 2013, orders were $69,919, compared with $64,440 for the same period of fiscal 2012, an increase of 9%. For the first nine months of fiscal 2013, orders increased in Canada, up $8,128, and in Asia, up $4,957, which was partly offset by lower domestic orders, down $5,247, and the Middle East, down $2,758.

Domestic orders were ~~50%, or $12,249, while international orders were 50%, or $12,330,~~87% of total orders, ~~in the current quarter. During the same period in the prior fiscal year, domestic orders were 80%,~~ or ~~$17,598,~~$28,635, and international orders were ~~20%~~13% of total orders, or ~~$4,335.~~

~~For~~$4,148, in the current quarter compared with the first ~~nine months~~quarter of fiscal 2013, when domestic orders were ~~53%~~41%, or $8,006, of total orders, ~~or $37,285, while international orders were 47%, or $32,634. During the first nine months of fiscal 2012, domestic orders were 66% of total orders, or $42,532,~~ and international orders were ~~34%~~59%, or ~~$21,908.~~$11,715, of total orders. See “Current Market Conditions” for additional information.

Backlog was ~~$90,741~~$90,382 at ~~December 31, 2012,~~June 30, 2013, compared with ~~$94,934~~$85,768 at March 31, ~~2012,~~2013, a ~~decrease of 4%.~~5% increase. Backlog is defined as the total dollar value of orders received for which revenue has not yet been recognized. ~~All orders in backlog represent orders from our traditional markets in established product lines.~~ Approximately ~~75%~~70% to ~~85%~~75% of orders currently in backlog are expected to be converted to sales within the next twelve months. This is lower than our historical conversion rate, which is approximately 85% to 90% over an upcoming 12-month period. The difference in our current backlog is due to the inclusion of the carrier project for the U.S. Navy and two orders for new U.S. nuclear plants. These projects have multi-year conversion cycles and significant stops and starts during their manufacturing processes.

At ~~December 31, 2012, 37%~~June 30, 2013, 28% of our backlog was attributable to equipment for refinery project work, ~~10%~~24% for chemical and petrochemical projects, ~~27%~~19% for power projects, including nuclear, and ~~26%~~29% for other industrial or commercial applications (including the carrier order for the U.S. ~~Navy order)~~Navy). At ~~December 31, 2011, 14%~~June 30, 2012, 30% of our backlog was ~~attributable~~attributed to equipment for refinery project work, ~~22%~~18% for chemical and petrochemical projects, ~~24%~~26% for power projects, ~~including nuclear,~~ and ~~40%~~26% for other industrial or commercial ~~applications (including the U.S. Navy order).~~

applications. At ~~December 31, 2012,~~June 30, 2013, we had no projects ~~were~~ on hold. The one project that was on hold at the end of the second quarter of fiscal 2013, with a value of $1,010 was released by our customer during the third quarter and is expected to be in production during our fiscal year ending March 31, 2014, which we refer to as “fiscal 2014”.

We believe that the refinery and petrochemical markets we ~~remain~~serve continue to be in the early stages of a ~~recovery in~~global recovery. Our pipeline has continued to expand throughout the ~~refinery~~last twelve months and ~~petrochemical markets.~~appears to have stabilized at a historically high level, approximately double the size that it was at the start of the last cycle. We ~~also~~believe that the current quarter’s order level of $32,783 reflects the improved pipeline. As the current fiscal year continues to unfold, we believe the improved strength of the energy markets ~~including the nuclear market,~~ will ~~continue to improve. During the first three quarters of fiscal 2013,~~become more evident. With our strong project pipeline, we achieved orders of $19,721, $25,619 and $24,579, sequentially. While the order level for the first nine months of fiscal 2013 was $69,919, or 9% above the same period last year, the fourth quarter of fiscal 2012 had orders of $42,269, a level we do not expect to match in this fiscal year’s fourth quarter. We continue to see significant activity in our pipeline and remain optimistic that we

~~will experience stronger~~anticipate improving quarterly order levels, ~~than~~though the ~~first three quarters~~timing of ~~fiscal 2013 during the next several quarters. Our backlog was $90,741 as of December 31, 2012, just 4% below our March 31, 2012 level, which represented our record high at $94,934.~~any improvements are still uncertain.

We expect revenue to be approximately $100,000 to $115,000 in fiscal ~~2013~~2014, a 5% decrease to ~~be between $102.5 and $107.5 million,~~a 10% increase as compared with ~~$103.2 million~~fiscal 2013. Our expected growth range for fiscal 2014 assumes conversion of backlog as well as continued market improvement and investment by our customers. To achieve the upper end of the range, we will need to continue to see strong order levels in the first half of the year and the conversion of a significant portion of those orders into revenue. Although we achieved a strong order level in the first quarter of fiscal ~~2012. Approximately 16%~~2014, we will need to ~~18%~~see those orders begin to convert to revenue in the second half of ~~our~~fiscal 2014. It is possible that some of the orders won in the first quarter of fiscal 2014 will have a longer than normal conversion period. The continued conversion to revenue of the U.S. Navy and two large nuclear projects is expected to come from Energy Steel. In fiscal 2012, Energy Steel contributed 17% of our revenue. In fiscal 2013, revenue was $74,068 in the first nine months of the year, an average of $24,689 per quarter. We expect strongercontribute significantly to sales in ~~the fourth quarter~~fiscal 2014. Unexpected delays in any of these projects could negatively impact fiscal ~~2013 compared with the average quarterly~~2014 revenue ~~achieved during the first nine months of the fiscal year.~~and earnings.

We expect gross profit margin in fiscal ~~2013~~2014 to be ~~between~~in the 29% ~~and~~to 31%~~. Gross~~ range. This margin range, which is below the margins achieved in the first ~~nine months~~quarter of fiscal ~~2013 was 29%. During fiscal 2012, we achieved gross~~2014, will be driven by the utilization of our capacity. We have pre-invested in operations and engineering personnel to prepare for current and future growth opportunities, which has the effect of dampening short term margin ~~of 32%, which included a few higher margin projects, especially~~improvement and increasing SG&A. However, reducing these costs in the ~~first two quarters of such year. In fiscal 2012, gross margin was 36% and 26% in~~short term, to achieve near term profitability gains, would be counter-productive to the ~~first and second halves~~larger expected benefits of the ~~year, respectively.~~

Gross profit margins are expected to improve with anticipated volume increases. Due to changes in geographic and end use market mix, we do not expect gross margins to reach the 40% range achieved at the peak of the prior cycle. We believe a long term gross profit margin percentage at cycle peak could reach the mid-to-upper 30% range. We also expect this recovery will continue to be more focused on emerging markets, which historically have lower margins and more competitive pricing than developed markets.future growth opportunities.

SG&A spending ~~for~~during fiscal ~~2013~~2014 is expected to be between ~~15.5%~~15% and 16% ~~of sales. Excluding the impact of the Energy Steel earn out adjustment, SG&A spending for fiscal 2013 is expected to be between 16.5% and 17%~~ of sales. We continue to invest in personnel as we prepare for increased opportunities ~~we expect~~ in fiscal ~~2014~~2013 and beyond. Our effective tax rate during fiscal ~~2013~~2014 is expected to be between ~~29%~~33% and ~~30%, which includes a benefit to be realized in the fourth quarter of fiscal 2013 as a result of the recent extension of the R&D tax credit.~~34%.

Cash flow in fiscal ~~2013~~2014 is expected to be positive, ~~although there is the possibility that cash flow in the fourth quarter of fiscal 2013 could be negative due to timing of changes in~~driven primarily by net income, partly offset by capital spending as well as a minimal need for additional working ~~capital, reversing a portion of the very strong cash generation from the third quarter, when cash and investments increased by $8,186.~~capital.

We have been named as a defendant in certain lawsuits alleging personal injury from exposure to asbestos allegedly contained in our products. We are a co-defendant with numerous other defendants in these lawsuits and intend to vigorously defend ourselves against these claims. The claims are similar to previous asbestos lawsuits that named us as a defendant. Such previous lawsuits either were dismissed when it was shown that we had not supplied products to the plaintiffs’ places of work or were settled by us for immaterial amounts.

As of ~~December 31, 2012,~~June 30, 2013, we were subject to the claims noted above, as well as other legal proceedings and potential claims that have arisen in the ordinary course of business.

Although the outcome of the lawsuits to which we are a party cannot be determined and an estimate of the reasonably possible loss or range of loss cannot be made, we do not believe that the outcomes, either individually or in the aggregate, will have a material effect on our results of operations, financial position or cash flows.

Our unaudited condensed consolidated financial statements are based on the selection of accounting policies and the application of significant accounting estimates, some of which require management to make significant assumptions.We believe that the most critical accounting estimates used in the preparation of our condensed consolidated financial statements relate to labor hour estimates used to recognize revenue under the percentage-of-completion method, accounting for business combinations, goodwill and intangible asset impairment, accounting for income taxes, accounting for contingencies, under which we accrue a loss when it is probable that a liability has been incurred and the amount can be reasonably estimated, and accounting for pensions and other postretirement benefits. For further information, refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8 “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the year ended March 31, ~~2012.~~2013.

We did not have any off balance sheet arrangements as of ~~December 31, 2012~~June 30, 2013 or March 31, ~~2012,~~2013, other than operating leases and letters of credit.

The principal market risks (i.e., the risk of loss arising from changes in the market) to which we are exposed are foreign currency exchange rates, price risk and project cancellation risk.

The assumptions applied in preparing the following qualitative and quantitative disclosures regarding foreign currency exchange rate, price risk and project cancellation risk are based upon volatility ranges experienced by us in relevant historical periods, our current knowledge of the marketplace, and our judgment of the probability of future volatility based upon the historical trends and economic conditions of the markets in which we operate.

International consolidated sales for the first ~~nine~~three months of fiscal ~~2013~~2014 were 47% of total sales compared with ~~48%~~44% for the same period of fiscal ~~2012.~~2013. Operating in markets throughout the world exposes us to movements in currency exchange rates. Currency movements can affect sales in several ways, the foremost being our ability to compete for orders against foreign competitors that base their prices on relatively weaker currencies. Business lost due to competition for orders against competitors using a relatively weaker currency cannot be quantified. In addition, cash can be adversely impacted by the conversion of sales made by us in a foreign currency to U.S. dollars. In the first ~~nine~~three months of each of fiscal ~~2013~~2014 and fiscal ~~2012,~~2013, all sales by us and our wholly-owned subsidiaries, for which we were paid, were denominated in the local currency (U.S. dollars or Chinese RMB).

We have limited exposure to foreign currency purchases. In each of the first ~~nine~~three months of fiscal ~~2013~~2014 and ~~2012,~~2013, our purchases in foreign currencies represented 1% of the cost of products sold. At certain times, we may enter into forward foreign currency exchange agreements to hedge our exposure against potential unfavorable changes in foreign currency values on significant sales contracts negotiated in foreign currencies. Forward foreign currency exchange contracts were not used in the periods being reported on in this Quarterly Report on Form 10-Q and as of ~~December 31, 2012~~June 30, 2013 and March 31, ~~2012,~~2013, we held no forward foreign currency contracts.

Operating in a global marketplace requires us to compete with other global manufacturers which, in some instances, benefit from lower production costs and more favorable economic conditions. Although we believe that our customers differentiate our products on the basis of our manufacturing quality and engineering experience and excellence, among other things, such lower production costs and more favorable economic conditions mean that certain of our competitors are able to offer products similar to ours at lower prices. Moreover, the cost of metals and other materials used in our products have experienced significant volatility. Such factors, in addition to the global effects of the recent volatility and disruption of the capital and credit markets, have resulted in pricing pressure on our products.

Open orders are reviewed continuously through communications with customers. If it becomes evident to us that a project is delayed well beyond its original shipment date, management will move the project into “placed on hold” (i.e., suspended) category. Furthermore, if a project is cancelled by our customer, it is removed from our backlog.

~~Economic conditions over the past several years have led to a higher likelihood of project cancellation by our customers. At December 31, 2012, we have no projects on hold.~~ We attempt to mitigate the risk of cancellation by structuring contracts with our customers to maximize the likelihood that progress payments made to us for individual projects cover the costs we have incurred. As a result, we do not believe we have a significant cash exposure to projects which may be cancelled. At June 30, 2013, we have no projects on hold.

Our President and Chief Executive Officer (principal executive officer) and Vice President-Finance & Administration and Chief Financial Officer (principal financial officer) each have evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, and as of such date, our President and Chief Executive Officer and Vice President-Finance & Administration and Chief Financial Officer concluded that our disclosure controls and procedures were effective in all material respects.

There has been no change to our internal control over financial reporting during the quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or that is reasonably likely to materially affect our internal control over financial reporting.

The below disclosure is being made pursuant to the instruction contained in Item 5 of Form 10-Q. The item ~~number~~numbers below ~~refers~~refer to the applicable Current Report on Form 8-K Item ~~number.~~numbers.

~~Item 5.02. Departure~~Employment Agreement with Jennifer R. Condame. On July 24, 2013, the Compensation Committee of the Board of Directors ~~or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.~~

~~On January 31, 2013, we executed a Separation Agreement (the “Agreement”)~~approved an employment agreement with ~~Robert A. Platt,~~Ms. Condame, who currently serves as our ~~former Vice President of Sales. Mr. Platt resigned on January 9, 2013. Under the terms of the Agreement, Mr. Platt~~Controller and Chief Accounting Officer. The agreement provides that Ms. Condame will continue to receive ~~a separation benefit equal to: (i) six months~~an annual minimum base salary continuation; and (ii) his target bonus under our Fiscal Year 2013 incentive compensation plan, payable in six monthly installments of $7,125 each. The Agreement also contains a waiver and release made in our favor by Mr. Platt as well as other ~~terms~~customary benefits. Ms. Condame’s Employment Agreement automatically renews such that it always has a one-year term remaining, unless we or Ms. Condame elect not to extend the term further, in which case the term will end on the first anniversary of the date on which notice of election not to extend is given. If not terminated sooner, the Employment Agreement will end on the last day of the month in which Ms. Condame turns 65.

Pursuant to our employment agreement with Ms. Condame, if her employment with us is terminated for any reason, she will be subject to an 18-month covenant not to compete with us, not to interfere in certain of our business relationships, and ~~conditions customary~~not to ~~agreements~~disclose to anyone our confidential information. Our Employment Agreement with Ms. Condame also provides for us to make certain payments to her in the event we terminate her employment without cause, as such term is defined in the Employment Agreement, or in the event that she voluntarily terminates her employment due to our breach of the Employment Agreement. Those payments include payment of any earned and accrued compensation, including any earned but unpaid annual bonus from a ~~similar nature.~~ prior year, as well as twelve months’ severance. In addition, Ms. Condame’s Employment Agreement provides that we will indemnify her for any actions brought against her that relate to duties she performed for us in good faith.

A copy of ~~the~~our Employment Agreement with Ms. Condame is attached to this Quarterly Report on Form ~~10-Q~~10–Q as Exhibit ~~10.1~~10.4 and the above ~~summary~~description of such Employment Agreement is qualified in its entirety by reference to the terms contained in such Exhibit.

At our Annual Meeting of Stockholders held on July 25, 2013, our stockholders voted on the matters described below.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Delaware		16-1194720
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

20 Florence Avenue, Batavia, New York		14020
(Address of principal executive offices)		(Zip Code)


			Page
Part I.	FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements		4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17

Item 3.	Quantitative and Qualitative ~~Disclosure~~Disclosures About Market Risk		2927

Item 4.	Controls and Procedures		3028

Part II.	OTHER INFORMATION

Item 5.	Other Information		3129

Item 6.	Exhibits		3130

Signatures		3231

Index to Exhibits		3332


	Pension and Other Postretirement Benefit Items			Foreign Currency Items		Total
Balance at April 1, 2013	$	(8,443	)	$	410	$	(8,033	)
Other comprehensive income before reclassifications		—			7		7
Amounts reclassified from accumulated other comprehensive loss		143			—		143

Net current-period other comprehensive income		143			7		150

Balance at June 30, 2013	$	(8,300	)	$	417	$	(7,883	)


Director Nominee	Votes For	Votes Withheld	Broker Non-Votes*
Jerald D. Bidlack	7,008,833	240,347	2,243,898
James J. Malvaso	7,047,538	201,642	2,243,898


Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss			Affected Line Item in the Condensed Consolidated Statements of Operations and Retained Earnings
Pension and other postretirement benefit items:
Amortization of unrecognized prior service benefit	$	40	⁽¹⁾
Amortization of actuarial loss		(261	)⁽¹⁾

		(221	)	Income before provision for income taxes
		(78	)	Provision for income taxes

	$	(143	)	Net income


Votes For	Votes Against	Abstentions	Broker Non-Votes*
6,976,921	171,008	101,251	2,243,898


		GRAHAM CORPORATION

By:	/s/ J~~EFFREY~~ G~~LAJCH~~Jeffrey Glajch
	Jeffrey Glajch
	Vice President-Finance & Administration and
	Chief Financial Officer


(10)	Material Contracts

#+#	10.1	~~Separation~~Compensation information, including information regarding stock option and restricted stock grants made to the Company’s named executive officers under the Amended and Restated Graham Corporation Incentive Plan to Increase Shareholder Value and named executive officer cash bonus information, previously filed on the Company’s Current Report on Form 8-K dated May 30, 2013, is incorporated herein by reference.

+ #	10.2	Form of Employee Performance-Vested Restricted Stock Award Agreement

+ #	10.3	Form of Employee Time Vested Restricted Stock Award Agreement

+ #	10.4	Employment Agreement between Graham Corporation and ~~Robert Platt dated January 31,~~Jennifer Condame executed and effective on July 25, 2013.

(31)	Rule 13a-14(a)/15d-14(a) Certifications

+	31.1	Certification of Principal Executive Officer

+	31.2	Certification of Principal Financial Officer

(32)	Section 1350 Certification

+	32.1	Section 1350 Certifications

(101)	Interactive Date File

*+	101.INS	XBRL Instance Document

*+	101.SCH	XBRL Taxonomy Extension Schema Document

*+	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

*+	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

*+	101.LAB	XBRL Taxonomy Extension Label Linkbase Document

*+	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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