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 ☒ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) 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).

As of ~~January 30, 2018,~~October 27, 2020, there were outstanding ~~9,768,026~~9,976,893 shares of the registrant’s common stock, par value ~~$.10~~$0.10 per share.

As of ~~December 31, 2017~~September 30, 2020 and March 31, ~~2017~~2020 and for the Three and ~~Nine-Month~~Six-Month Periods Ended ~~December 31, 2017~~September 30, 2020 and ~~2016~~2019

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	December 31,						December 31,						September 30,						September 30,
	2017			2016			2017			2016			2020			2019			2020			2019
	(Amounts in thousands, except per share data)						(Amounts in thousands, except per share data)						(Amounts in thousands, except per share data)						(Amounts in thousands, except per share data)
Net sales	$	17,281		$	22,654		$	55,356		$	66,145		$	27,954		$	21,643		$	44,664		$	42,236
Cost of products sold		13,696			16,353			43,075			50,723			20,261			16,695			35,403			32,574
Gross profit		3,585			6,301			12,281			15,422			7,693			4,948			9,261			9,662
Other expenses and income:
Selling, general and administrative		4,007			3,746			11,270			10,462			4,253			3,847			8,155			8,403
Selling, general and administrative – amortization		59			58			177			175			—			—			—			11
Impairment of goodwill and intangible assets		14,816			—			14,816			—
Restructuring charge		—			—			316			630
Other expense														—			—			—			523
Other income														(54	)		(87	)		(109	)		(174	)
Interest income		(142	)		(100	)		(455	)		(272	)		(26	)		(363	)		(120	)		(762	)
Interest expense		3			3			8			7			3			4			8			7
Total other expenses and income		18,743			3,707			26,132			11,002			4,176			3,401			7,934			8,008
(Loss) income before provision for income taxes		(15,158	)		2,594			(13,851	)		4,420
(Benefit) provision for income taxes		(3,536	)		754			(3,174	)		1,198
Net (loss) income		(11,622	)		1,840			(10,677	)		3,222
Retained earnings at beginning of period		109,731			108,655			110,544			109,013
Dividends		(880	)		(876	)		(2,638	)		(2,616	)
Retained earnings at end of period	$	97,229		$	109,619		$	97,229		$	109,619
Income before provision for income taxes														3,517			1,547			1,327			1,654
Provision for income taxes														773			342			401			367
Net income													$	2,744		$	1,205		$	926		$	1,287
Per share data
Basic:
Net (loss) income	$	(1.19	)	$	0.19		$	(1.09	)	$	0.33
Net income													$	0.27		$	0.12		$	0.09		$	0.13
Diluted:
Net (loss) income	$	(1.19	)	$	0.19		$	(1.09	)	$	0.33
Net income													$	0.27		$	0.12		$	0.09		$	0.13
Weighted average common shares outstanding:
Basic		9,768			9,727			9,762			9,709			9,977			9,883			9,936			9,869
Diluted		9,768			9,733			9,762			9,714			9,977			9,885			9,936			9,872
Dividends declared per share	$	0.09		$	0.09		$	0.27		$	0.27		$	0.11		$	0.11		$	0.22		$	0.21

	Three Months Ended						Nine Months Ended						Three Months Ended					Six Months Ended
	December 31,						December 31,						September 30,					September 30,
	2017			2016			2017			2016			2020		2019			2020		2019
	(Amounts in thousands)						(Amounts in thousands)						(Amounts in thousands)					(Amounts in thousands)
Net (loss) income	$	(11,622	)	$	1,840		$	(10,677	)	$	3,222
Net income													$	2,744	$	1,205		$	926	$	1,287
Other comprehensive income:
Foreign currency translation adjustment		76			(135	)		216			(283	)		146		(136	)		155		(223	)
Defined benefit pension and other postretirement plans net of income tax expense (benefit) of $(17) and $123, for the three months ended December 31, 2017 and 2016, respectively, and $169 and $369 for the nine months ended December 31, 2017 and 2016, respectively		279			225			619			674
Defined benefit pension and other postretirement plans net of income tax expense of $63 and $54 for the three months ended September 30, 2020 and 2019, respectively, and $124 and $109 for the six months ended September 30, 2020 and 2019, respectively														204		195			409		389
Total other comprehensive income		355			90			835			391			350		59			564		166
Total comprehensive (loss) income	$	(11,267	)	$	1,930		$	(9,842	)	$	3,613
Total comprehensive income													$	3,094	$	1,264		$	1,490	$	1,453

	December 31,			March 31,			September 30,			March 31,
	2017			2017			2020			2020
	(Amounts in thousands, except per share data)						(Amounts in thousands, except per share data)
Assets
Current assets:
Cash and cash equivalents	$	36,159		$	39,474		$	62,356		$	32,955
Investments		38,023			34,000			5,500			40,048
Trade accounts receivable, net of allowances ($336 and $168 at December 31 and March 31, 2017, respectively)		16,555			11,483
Trade accounts receivable, net of allowances ($41 and $33 at September 30 and March 31, 2020, respectively)								19,276			15,400
Unbilled revenue		10,709			15,842			13,691			14,592
Inventories		8,899			9,246			20,615			22,291
Prepaid expenses and other current assets		1,181			681			1,378			906
Income taxes receivable		1,288			—			322			485
Total current assets		112,814			110,726			123,138			126,677
Property, plant and equipment, net		16,098			17,021			17,327			17,587
Prepaid pension asset		3,110			2,340			3,881			3,460
Goodwill		1,222			6,938
Permits		1,700			10,300
Other intangible assets, net		3,433			4,068
Operating lease assets								171			243
Other assets		246			177			105			153
Total assets	$	138,623		$	151,570		$	144,622		$	148,120
Liabilities and stockholders’ equity
Current liabilities:
Current portion of capital lease obligations	$	105		$	107
Current portion of finance lease obligations							$	26		$	40
Accounts payable		9,386			10,295			11,669			14,253
Accrued compensation		4,418			5,189			5,082			4,453
Accrued expenses and other current liabilities		2,722			3,723			3,867			3,352
Customer deposits		17,814			12,407			24,838			26,983
Income taxes payable		—			317
Operating lease liabilities								110			153
Total current liabilities		34,445			32,038			45,592			49,234
Capital lease obligations		67			143
Finance lease obligations								45			55
Operating lease liabilities								53			82
Deferred income tax liability		736			4,051			988			721
Accrued pension liability		534			467			800			747
Accrued postretirement benefits		780			761			567			557
Other long-term liabilities		126			—
Total liabilities		36,688			37,460			48,045			51,396
Commitments and contingencies (Note 11)
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $1.00 par value, 500 shares authorized								—			—
Common stock, $.10 par value, 25,500 shares authorized 10,579 and 10,548 shares issued and 9,768 and 9,740 shares outstanding at December 31 and March 31, 2017, respectively		1,058			1,055
Common stock, $0.10 par value, 25,500 shares authorized, 10,780 and 10,689 shares issued and 9,977 and 9,881 shares outstanding at September 30 and March 31, 2020, respectively								1,078			1,069
Capital in excess of par value		23,573			23,176			26,866			26,361
Retained earnings		97,229			110,544			90,120			91,389
Accumulated other comprehensive loss		(7,599	)		(8,434	)		(8,992	)		(9,556	)
Treasury stock (811 and 808 shares at December 31 and March 31, 2017, respectively)		(12,326	)		(12,231	)
Treasury stock (803 and 808 shares at September 30 and March 31, 2020, respectively)								(12,495	)		(12,539	)
Total stockholders’ equity		101,935			114,110			96,577			96,724
Total liabilities and stockholders’ equity	$	138,623		$	151,570		$	144,622		$	148,120

	Six Months Ended
	September 30,
	2020			2019
Operating activities:	(Dollar amounts in thousands)
Net income	$	926		$	1,287
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation		972			980
Amortization		—			11
Amortization of actuarial losses		533			498
Equity-based compensation expense		494			412
Gain on disposal or sale of property, plant and equipment		3			—
Loss on sale of Energy Steel & Supply Co.		—			87
Deferred income taxes		191			119
(Increase) decrease in operating assets:
Accounts receivable		(3,820	)		5,287
Unbilled revenue		901			(5,514	)
Inventories		1,808			990
Prepaid expenses and other current and non-current assets		(456	)		109
Income taxes receivable		163			233
Operating lease assets		75			138
Prepaid pension asset		(421	)		(435	)
Increase (decrease) in operating liabilities:
Accounts payable		(2,544	)		(4,721	)
Accrued compensation, accrued expenses and other current and non-current liabilities		1,214			(268	)
Customer deposits		(2,285	)		(1,116	)
Operating lease liabilities		(75	)		(64	)
Long-term portion of accrued compensation, accrued pension liability and accrued postretirement benefits		63			52
Net cash used by operating activities		(2,258	)		(1,915	)
Investing activities:
Purchase of property, plant and equipment		(797	)		(679	)
Proceeds from disposal of property, plant and equipment		6			—
Proceeds from the sale of Energy Steel & Supply Co.		—			602
Purchase of investments		(31,603	)		(82,414	)
Redemption of investments at maturity		66,151			83,232
Net cash provided by investing activities		33,757			741
Financing activities:
Principal repayments on finance lease obligations		(24	)		(25	)
Principal repayments on long-term debt		(4,599	)
Proceeds from the issuance of long-term debt		4,599
Dividends paid		(2,195	)		(2,075	)
Purchase of treasury stock		(23	)		(230	)
Net cash used by financing activities		(2,242	)		(2,330	)
Effect of exchange rate changes on cash		144			(187	)
Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale		29,401			(3,691	)
Net decrease in cash classified within current assets held for sale		—			552
Net increase (decrease) in cash and cash equivalents		29,401			(3,139	)
Cash and cash equivalents at beginning of period		32,955			15,021
Cash and cash equivalents at end of period	$	62,356		$	11,882

Nine Months Ended

December 31,

2017

2016

Operating activities:

(Dollar amounts in thousands)

Net (loss) income

$
(10,677
)

$
3,222

Adjustments to reconcile net income to net cash provided by operating
activities:

Depreciation

1,490

1,571

Amortization

177

175

Amortization of unrecognized prior service cost and actuarial losses

788

1,043

Impairment of goodwill and purchased intangible assets

14,816

—

Stock-based compensation expense

362

433

Loss on disposal or sale of property, plant and equipment

1

1

Deferred income taxes

(3,498
)

10

(Increase) decrease in operating assets:

Accounts receivable

(5,029
)

1,126

Unbilled revenue

5,170

(2,651
)
Inventories

352

1,697

Prepaid expenses and other current and non-current assets

(591
)

(489
)
Income taxes receivable

(1,605
)

1,109

Prepaid pension asset

(770
)

—

Increase (decrease) in operating liabilities:

Accounts payable

(1,005
)

(2,173
)
Accrued compensation, accrued expenses and other current and non-current liabilities

(1,593
)

(558
)
Customer deposits

5,400

6,699

Long-term portion of accrued compensation, accrued pension liability
and accrued postretirement benefits

86

(508
)
Net cash provided by operating activities

3,874

10,707

Investing activities:

Purchase of property, plant and equipment

(543
)

(241
)
Proceeds from disposal of property, plant and equipment

1

—

Purchase of investments

(34,023
)

(39,000
)
Redemption of investments at maturity

30,000

45,000

Net cash (used) provided by investing activities

(4,565
)

5,759

Financing activities:

Principal repayments on capital lease obligations

(78
)

(38
)
Issuance of common stock

—

79

Dividends paid

(2,638
)

(2,616
)
Purchase of treasury stock

(119
)

(29
)
Excess tax deficiency on stock awards

—

(26
)
Net cash used by financing activities

(2,835
)

(2,630
)
Effect of exchange rate changes on cash

211

(231
)
Net (decrease) increase in cash and cash equivalents

(3,315
)

13,605

Cash and cash equivalents at beginning of year

39,474

24,072

Cash and cash equivalents at end of period

$
36,159

$
37,677

	Common Stock						Capital in						Accumulated Other						Total
				Par			Excess of			Retained			Comprehensive			Treasury			Stockholders'
	Shares			Value			Par Value			Earnings			Loss			Stock			Equity
Balance at April 1, 2020		10,689		$	1,069		$	26,361		$	91,389		$	(9,556	)	$	(12,539	)	$	96,724
Comprehensive income											(1,818	)		214						(1,604	)
Issuance of shares		113			11			(11	)											—
Forfeiture of shares		(22	)		(2	)		2												—
Dividends											(1,097	)								(1,097	)
Recognition of equity-based compensation expense								164												164
Purchase of treasury stock																	(23	)		(23	)
Balance at June 30, 2020		10,780			1,078			26,516			88,474			(9,342	)		(12,562	)		94,164
Comprehensive income											2,744			350						3,094
Dividends											(1,098	)								(1,098	)
Recognition of equity-based compensation expense								330												330
Issuance of treasury stock								20									67			87
Balance at September 30, 2020		10,780		$	1,078		$	26,866		$	90,120		$	(8,992	)	$	(12,495	)	$	96,577

	Common Stock						Capital in						Accumulated Other						Total
				Par			Excess of			Retained			Comprehensive			Treasury			Stockholders'
	Shares			Value			Par Value			Earnings			Loss			Stock			Equity
Balance at April 1, 2019		10,650		$	1,065		$	25,277		$	93,847		$	(8,833	)	$	(12,390	)	$	98,966
Cumulative effect of change in accounting principle											(80	)								(80	)
Comprehensive income											82			107						189
Issuance of shares		83			8			(8	)											—
Forfeiture of shares		(34	)		(3	)		3												—
Dividends											(988	)								(988	)
Recognition of equity-based compensation expense								88												88
Purchase of treasury stock																	(230	)		(230	)
Balance at June 30, 2019		10,699			1,070			25,360			92,861			(8,726	)		(12,620	)		97,945
Comprehensive income											1,205			59						1,264
Dividends											(1,087	)								(1,087	)
Recognition of equity-based compensation expense								324												324
Issuance of treasury stock								30									19			49
Balance at September 30, 2019		10,699		$	1,070		$	25,714		$	92,979		$	(8,667	)	$	(12,601	)	$	98,495

Graham Corporation's (the "Company's") Condensed Consolidated Financial Statements include its ~~(i)~~ wholly-owned foreign ~~subsidiary~~subsidiaries located in Suzhou, China and ~~(ii) wholly-owned domestic subsidiary located in Lapeer, Michigan.~~Ahmedabad, India. 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~~8-03 of Regulation S-X, each as promulgated by the U.S. Securities and Exchange 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, ~~2017~~2020 presented herein was derived from the Company’s audited Consolidated Balance Sheet as of March 31, ~~2017.~~2020. 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, ~~2017~~2020 ("fiscal ~~2017"~~2020"). 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~~six months ended ~~December 31, 2017~~September 30, 2020 are not necessarily indicative of the results that may be expected for the current fiscal year, which ends March 31, ~~2018~~2021 ("fiscal ~~2018"~~2021").

The Company recognizes revenue on contracts when or as it satisfies a performance obligation by transferring control of the product to the customer. For contracts in which revenue is recognized upon shipment, control is generally transferred when products are shipped, title is transferred, significant risks of ownership have transferred, the Company has rights to payment, and rewards of ownership pass to the customer. For contracts in which revenue is recognized over time, control is generally transferred as the Company creates an asset that does not have an alternative use to the Company and the Company has an enforceable right to payment for the performance completed to date.

The following table presents the Company’s revenue disaggregated by product line and geographic area:

	Three Months Ended				Six Months Ended
	September 30,				September 30,
Product Line	2020		2019		2020		2019
Heat transfer equipment	$	13,307	$	6,479	$	23,980	$	14,331
Vacuum equipment		9,381		8,733		11,932		14,263
All other		5,266		6,431		8,752		13,642
Net sales	$	27,954	$	21,643	$	44,664	$	42,236


Geographic Region
Asia	$	4,529	$	1,018	$	9,692	$	4,237
Canada		1,938		1,896		2,930		3,244
Middle East		988		512		1,437		1,285
South America		2,592		2,117		2,812		2,476
U.S.		17,252		15,731		26,690		30,179
All other		655		369		1,103		815
Net sales	$	27,954	$	21,643	$	44,664	$	42,236

A performance obligation represents a promise in a contract to provide a distinct good or service to a customer. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Transaction price reflects the

amount of consideration to which the Company expects to be entitled in exchange for transferred products. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized as the performance obligation is satisfied. In certain cases, the Company may separate a contract into more than one performance obligation, while in other cases, several products may be part of a fully integrated solution and are bundled into a single performance obligation. If a contract is separated into more than one performance obligation, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods underlying each performance obligation. The Company has made an accounting policy election to exclude from the measurement of the contract price all ~~contracts with~~taxes assessed by government authorities that are collected by the Company from its customers. The Company does not adjust the contract price for the effects of a ~~planned manufacturing process~~financing component if the Company expects, at contract inception, that the period between when a product is transferred to a customer and when the customer pays for the product will be one year or less. Shipping and handling fees billed to the customer are recorded in ~~excess~~revenue and the related costs incurred for shipping and handling are included in cost of ~~four weeks (which approximates 575 direct labor hours) using~~products sold.

Revenue on the ~~percentage-of-completion method. The~~ majority of the ~~Company's~~Company’s contracts, as measured by number of contracts, is recognized upon shipment to the customer. Revenue on larger contracts, which are fewer in number but represent the majority of revenue, is recognized ~~under this methodology.~~over time. Revenue from contracts that is recognized upon shipment accounted for approximately 40% and 30% of revenue for the three-month periods ended September 30, 2020 and 2019, respectively, and revenue from contracts that is recognized over time accounted for approximately 60% and 70% of revenue for the three-month periods ended September 30, 2020 and 2019, respectively. Revenue from contracts that is recognized upon shipment accounted for approximately 50% and 35% of revenue for the six-month periods ended September 30, 2020 and 2019, respectively, and revenue from contracts that is recognized over time accounted for approximately 50% and 65% of revenue for the six-month periods ended September 30, 2020 and 2019, respectively. During the six months ended September 30, 2020, revenue recognized over time as a percentage of total revenue was lower as compared with the prior year period due to limited production on large contracts during the first quarter of fiscal 2021 as a result of the COVID-19 pandemic. The Company recognizes revenue over time when contract performance results in the creation of a product for which the Company does not have an alternative use and the contract includes an enforceable right to payment in an amount that corresponds directly with the value of the performance completed. To measure progress towards completion on performance obligations for which revenue is recognized over time the Company utilizes an input method based upon a ratio of direct labor hours incurred to date to management’s estimate of the total labor hours to be incurred on each contract or an output method based upon completion of operational milestones, depending upon the nature of the contract. The Company has established the systems and procedures essential to developing the estimates required to account for ~~contracts using the percentage-of-completion method. The percentage-of-completion method is determined~~performance obligations over time. These procedures include monthly review by ~~comparing actual labor~~management of costs incurred, ~~to a specific date to management's estimate~~progress towards completion, identified risks and opportunities, sourcing determinations, changes in estimates of ~~the total labor~~costs yet to be incurred, ~~on each contract or completion~~availability of ~~operational milestones assigned to each contract. Contracts in progress are reviewed monthly~~materials, and execution by ~~management, and sales~~subcontractors. Sales and earnings are adjusted in current accounting periods based on revisions in the contract value due to pricing changes and estimated costs at completion. Losses on contracts are recognized immediately when evident to management.

~~Revenue~~The timing of revenue recognition, invoicing and cash collections affect trade accounts receivable, unbilled revenue (contract assets) and customer deposits (contract liabilities) on the Condensed Consolidated Balance Sheets. Unbilled revenue represents revenue on contracts ~~not accounted for using the percentage-of-completion method~~that is recognized ~~utilizing~~over time and exceeds 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 shipmentamount that has been billed to the customer. ~~Substantial completion~~Unbilled revenue is ~~consistently defined~~separately presented in the Condensed Consolidated Balance Sheets. The Company may have an unconditional right to payment upon billing and prior to satisfying the performance obligations. The Company will then record a contract liability and an offsetting asset of equal amount until the deposit is collected and the performance obligations are satisfied. Customer deposits are separately presented in the Condensed Consolidated Balance Sheets. Customer deposits are not considered a significant financing component as they are generally received less than one year before the product is completed or used to procure specific material on a contract, as well as related overhead costs incurred during design and construction.

Contract liabilities at ~~least 95% complete with regard to direct labor hours. Customer acceptance is generally required throughout the construction process~~September 30, 2020 and March 31, 2020 include $2,420 and $3,660, respectively, of customer deposits for which the Company has ~~no further material obligations under its contracts after~~an unconditional right to collect payment. Trade accounts receivable, as presented on the Condensed Consolidated Balance Sheets, includes corresponding balances at September 30, 2020 and March 31, 2020, respectively. Revenue recognized in the three and six months ended September 30, 2020 that was included in the contract liability balance at March 31, 2020 was $2,700 and $10,050, respectively. Changes in the net contract liability balance during the six months ended September 30, 2020 were impacted by a $901 decrease in contract assets, of which $12,283 was due to contract progress offset by invoicing to customers

of $13,184. In addition, contract liabilities decreased $2,145 driven by revenue ~~is recognized.~~recognized in the current period that was included in the contract liability balance at March 31, 2020 offset by new customer deposits of $7,905.

Receivables billed but not paid under retainage provisions in the Company’s customer contracts were ~~$1,141~~$2,232 and ~~$971~~$2,016 at ~~December 31, 2017~~September 30, 2020 and March 31, ~~2017,~~2020, respectively.

Incremental costs to obtain a contract consist of sales employee and agent commissions. Commissions paid to employees and sales agents are capitalized when paid and amortized to selling, general and administrative expense when the related revenue is recognized. Capitalized costs, net of amortization, to obtain a contract were $309 and $45 at September 30, 2020 and March 31, 2020, respectively, and are included in the line item "Prepaid expenses and other current assets" in the Condensed Consolidated Balance Sheets. The related amortization expense was $89 and $40 in the three months ended September 30, 2020 and 2019, respectively, and $251 and $86 in the six months ended September 30, 2020 and 2019, respectively.

The Company’s remaining unsatisfied performance obligations represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. The Company also refers to this measure as backlog. As of September 30, 2020, the Company had remaining unsatisfied performance obligations of $114,851. The Company expects to recognize revenue on approximately 60% to 65% of the remaining performance obligations within one year, 15% to 20% in one to two years and the remaining beyond two years.

Investments consist of certificates of deposits with financial institutions. All investments have original maturities of greater than three months and less than one year and are classified as held-to-maturity, as the Company believes it has the intent and ability to hold the securities to maturity. Investments are stated at amortized cost which approximates fair value. All investments held by the Company at ~~December 31, 2017~~September 30, 2020 are scheduled to mature on or before ~~May 31, 2018.~~December 24, 2020.

Inventories are stated at the lower of cost or ~~market,~~net realizable value, using the average cost method. 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 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,		March 31,		September 30,		March 31,
	2017		2017		2020		2020
Raw materials and supplies	$	3,034	$	3,016	$	3,302	$	3,061
Work in process		9,334		12,573		14,832		18,018
Finished products		935		891		2,481		1,212
		13,303		16,480
Less - progress payments		4,404		7,234
Total	$	8,899	$	9,246	$	20,615	$	22,291

Gross
Carrying
Amount

Accumulated
Amortization

Impairment
Loss

Net
Carrying
Amount

At December 31, 2017

Intangibles subject to amortization:

Customer relationships

$
2,700

$
1,267

$
—

$
1,433

Intangibles not subject to amortization:

Permits

$
10,300

$
—

$
8,600

$
1,700

Tradename

2,500

—

500

2,000

$
12,800

$
—

$
9,100

$
3,700

At March 31, 2017

Intangibles subject to amortization:

Customer relationships

$
2,700

$
1,132

$
—

$
1,568

Intangibles not subject to amortization:

Permits

$
10,300

$
—

$
—

$
10,300

Tradename

2,500

—

—

2,500

$
12,800

$
—

$
—

$
12,800

Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives. Intangible amortization expense for each of the three-month periods ended December 31, 2017 and 2016 was $45. Intangible amortization expense for each of the nine-month periods ended December 31, 2017 and 2016 was $135. As of December 31, 2017, amortization expense is estimated to be $45 for the remainder of fiscal 2018 and $180 in each of the fiscal years ending March 31, 2019, 2020, 2021 and 2022.

During the third quarter of fiscal 2018, the Company performed its annual goodwill and intangible asset impairment review. The Company assesses impairment by comparing the fair value of its reporting units and intangible assets to their related carrying value. Accounting Standards Update No. 2015-07, “Fair Value Measurement (Topic 820), establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1 – Valuations based on quoted prices in active markets for identical assets of liabilities that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Level 2 – Valuations determined from quoted prices for similar assets of liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

The Company estimated the fair value of intangible assets and goodwill of its commercial nuclear power business related to the December 2010 acquisition of Energy Steel & Supply Co. (“Energy Steel”) using the income approach. Under the income approach, the fair value of the business is calculated based on the present value of estimated future cash flows. Cash flow projections are based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the business and the projected cash flows. The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy outlined above. The impairment review indicated that the fair value of the permits, tradename and goodwill of the business were substantially lower than the carrying value due to reduced investment from the U.S. nuclear power market, the strength of the Energy Steel brand relative to larger more vertically integrated suppliers, and the bankruptcy of Westinghouse Electric Company which resulted in the stoppage of work at the Summer, SC nuclear facility. As a result, in the third quarter of fiscal 2018 the Company recorded impairment losses of $8,600, $500, and $5,716 for permits, tradename and goodwill, respectively.

The ~~Amended and Restated 2000~~2020 Graham Corporation Equity Incentive Plan ~~to Increase Shareholder Value, as~~(the "2020 Plan") was approved by the Company’s stockholders at the Annual Meeting on ~~July 28, 2016,~~August 11, 2020 and provides for the issuance of ~~up to 1,375~~422 shares of common stock in connection with grants of incentive stock options, non-qualified stock options, restricted stock ~~awards~~units and ~~performance~~stock awards to officers, key employees and outside ~~directors: provided, however, that~~directors. The shares available for issuance include 112 remaining available shares under the Company’s prior plan, the Amended and Restated 2000 Graham Corporation Incentive Plan to Increase Shareholder Value (the "2000 Plan"). As of August 11, 2020, the effective date of the 2020 Plan, 0 further awards will be granted under the 2000 Plan. However, any previously outstanding award granted under the 2000 Plan remains subject to the terms of such plan until the time it is no ~~more than 467~~longer outstanding.

NaN restricted stock awards were granted in the three-month periods ended September 30, 2020 and 2019. Restricted stock awards granted in the six-month periods ended September 30, 2020 and 2019 were 113 and 83, respectively. Restricted shares of ~~common stock may be used~~54 and 40 granted to officers in fiscal 2021 and fiscal 2020, respectively, vest 100% on the third anniversary of the grant date subject to the satisfaction of the performance metrics for ~~awards other than stock options.~~the applicable three-year period. Restricted shares of 38 and 28 granted to officers and key employees in fiscal 2021 and fiscal 2020, respectively, vest 33⅓% per year over a three-year term. Restricted shares of 21 and 15 granted to directors in fiscal 2021 and fiscal 2020, respectively, vest 100% on the first year anniversary of the grant date. 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.

No restricted stock awards were granted in the three-month periods ended December 31, 2017 and 2016. Restricted stock awards granted in the nine-month periods ended December 31, 2017 and 2016 were 59 and 82, respectively. Restricted shares of 30 and 43 granted to officers in fiscal 2018 and fiscal 2017, respectively, vest 100% on the third anniversary of the grant date subject to the satisfaction of the performance metrics for the applicable three-year period. Restricted shares of 22 and 31 granted to officers and key employees in fiscal 2018 and fiscal 2017, respectively, vest 33⅓% per year over a three-year term. Restricted shares of 7 and 8 granted to directors in fiscal 2018 and fiscal 2017, respectively, vest 100% on the first year anniversary of the grant date. No NaN stock option awards were granted in the three-month or ~~nine-month~~six-month periods ended ~~December 31, 2017~~September 30, 2020 and ~~2016 December 31, 2017 and 2016.~~2019.

During the three months ended ~~December 31, 2017~~September 30, 2020 and ~~2016,~~2019, the Company recognized ~~stock-based~~equity-based compensation costs related to ~~stock option and~~ restricted stock awards of ~~$213~~$316 and ~~$200,~~$313, respectively. The income tax benefit recognized related to ~~stock-based~~equity-based compensation was ~~$24~~$73 and ~~$70~~$69 for the three months ended ~~December 31, 2017~~September 30, 2020 and ~~2016,~~2019, respectively. During the ~~nine~~six months ended ~~December 31, 2017~~September 30, 2020 and ~~2016,~~2019, the Company recognized ~~stock-based~~equity-based compensation costs related to ~~stock option and~~ restricted stock awards of ~~$362~~$471 and ~~$427,~~$401, respectively. The income tax benefit recognized related to ~~stock-based~~equity-based compensation was ~~$77~~$111 and ~~$151~~$89 for the ~~nine~~six months ended ~~December 31, 2017~~September 30, 2020 and ~~2016,~~2019, respectively.

The Company has an Employee Stock Purchase Plan (the "ESPP"), which allows eligible employees to purchase shares of the Company's common stock at a discount of up to 15% of its fair market value on the ~~(i)~~(1) last, ~~(ii)~~(2) first or ~~(iii)~~(3) lower of the last or first day of the six-month offering period. A total of 200 shares of common stock may be purchased under the ESPP. ~~In each of~~During the three months ended ~~December 31, 2017~~September 30, 2020 and ~~2016,~~2019, the Company recognized ~~stock-based~~equity-based compensation costs of $0$14 and $11, respectively, related to the ESPP and $0$3 and $2, respectively, of related tax benefits. During the ~~nine~~six months ended ~~December 31, 2017~~September 30, 2020 and ~~2016,~~2019, the Company recognized ~~stock-based~~equity-based compensation costs of $0$23 and ~~$6,~~$11, respectively, related to the ESPP and $0$5 and $2, respectively, of related tax benefits.

Basic ~~(loss)~~ income per share is computed by dividing net ~~(loss)~~ income by the weighted average number of common shares outstanding for the period. Diluted ~~(loss)~~ income per share is calculated by dividing net ~~(loss)~~ 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 ~~(loss)~~ income per share is presented below:

Three Months Ended

Nine Months Ended

December 31,

December 31,

2017

2016

2017

2016

Basic (loss) income per share

Numerator:

Net (loss) income

$
(11,622
)

$
1,840

$
(10,677
)

$
3,222

Denominator:

Weighted average common shares outstanding

9,768

9,727

9,762

9,709

Basic (loss) income per share

$
(1.19
)

$
.19

$
(1.09
)

$
.33

Diluted income per share

Numerator:

Net (loss) income

$
(11,622
)

$
1,840

$
(10,677
)

$
3,222

Denominator:

Weighted average common shares outstanding

9,768

9,727

9,762

9,709

Stock options outstanding

—

6

—

5

Weighted average common and potential common
shares outstanding

9,768

9,733

9,762

9,714

Diluted (loss) income per share

$
(1.19
)

$
.19

$
(1.09
)

$
.33

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Basic income per share
Numerator:
Net income	$	2,744	$	1,205	$	926	$	1,287
Denominator:
Weighted average common shares outstanding		9,977		9,883		9,936		9,869
Basic income per share	$	0.27	$	0.12	$	0.09	$	0.13
Diluted income per share
Numerator:
Net income	$	2,744	$	1,205	$	926	$	1,287
Denominator:
Weighted average common shares outstanding		9,977		9,883		9,936		9,869
Stock options outstanding		—		2		—		3
Weighted average common and potential common shares outstanding		9,977		9,885		9,936		9,872
Diluted income per share	$	0.27	$	0.12	$	0.09	$	0.13

None of the options to purchase shares of common stock which totaled 69 were included in the computation of diluted loss per share for the three and nine months ended December 31, 2017 as the effect would be anti-dilutive due to the net loss in the periods. Options to purchase a total of 1637 and 4 shares of common stock were outstanding at ~~December 31, 2016~~September 30, 2020 and 2019, respectively, but were not included in the above computation of diluted income per share ~~in the three and nine-month periods ended December 31, 2016~~ given their exercise prices as they would not be dilutive upon issuance.

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

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	December 31,						December 31,						September 30,						September 30,
	2017			2016			2017			2016			2020			2019			2020			2019
Balance at beginning of period	$	301		$	582		$	538		$	686		$	305		$	358		$	359		$	366
Expense (income) for product warranties		22			(81	)		(59	)		31
(Income) expense for product warranties														14			1			(5	)		28
Product warranty claims paid		(22	)		(4	)		(178	)		(220	)		(11	)		(11	)		(46	)		(46	)
Balance at end of period	$	301		$	497		$	301		$	497		$	308		$	348		$	308		$	348

Income of ~~$59~~$5 for product warranties in the ~~nine~~six months ended ~~December 31, 2017 and the income of $81 in the three months ended December 31, 2016~~September 30, 2020 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 $8 and $7 in the ~~nine-month~~six-month periods ended ~~December 31, 2017~~September 30, 2020 and ~~2016.~~2019, respectively. Income taxes (refunded) paid for the ~~nine~~six months ended ~~December 31, 2017~~September 30, 2020 and ~~2016~~2019 were ~~$1,801~~$(93) and ~~$104,~~$14, respectively.

In the ~~nine~~six months ended ~~December 31, 2017~~September 30, 2020 and ~~2016,~~2019, non-cash activities included the issuance of treasury stock valued at ~~$63~~$87 and ~~$107,~~$49, respectively, to the Company’s ~~Employee Stock Purchase Plan.~~ ESPP.

At ~~December 31 2017~~September 30, 2020 and ~~2016, respectively,~~2019, there were ~~$29~~$86 and ~~$31~~$87, respectively, 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.

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	December 31,						December 31,						September 30,						September 30,
	2017			2016			2017			2016			2020			2019			2020			2019
Service cost	$	149		$	151		$	448		$	451		$	115		$	124		$	231		$	248
Interest cost		356			362			1,067			1,087			303			323			606			646
Expected return on assets		(743	)		(718	)		(2,232	)		(2,155	)		(628	)		(665	)		(1,257	)		(1,329	)
Amortization of actuarial loss		253			337			760			1,013			260			242			520			484
Net pension cost	$	15		$	132		$	43		$	396		$	50		$	24		$	100		$	49

The Company made 0 contributions to its defined benefit pension plan during the ~~nine~~six months ended ~~December 31, 2017 of $52~~September 30, 2020 and does ~~not~~0t expect to make any contributions to the plan for the balance of fiscal ~~2018.~~2021.

	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	December 31,				December 31,				September 30,				September 30,
	2017		2016		2017		2016		2020		2019		2020		2019
Interest cost	$	6	$	5	$	19	$	19	$	4	$	6	$	9	$	11
Amortization of actuarial loss		9		11		28		30		7		7		13		14
Net postretirement benefit cost	$	15	$	16	$	47	$	49	$	11	$	13	$	22	$	25

The Company paid no0 benefits related to its postretirement benefit plan during the ~~nine~~six months ended ~~December 31, 2017.~~September 30, 2020. The Company expects to pay benefits of approximately ~~$83~~$77 for the balance of fiscal ~~2018.~~2021.

The components of net periodic benefit cost other than service cost are included in the line item “Other income” in the Condensed Consolidated Statements of Income.

The Company self-funds the medical insurance coverage it provides to its U.S. based employees. The Company maintains a stop loss insurance policy in order to limit its exposure to claims. The liability of ~~$134~~$160 and ~~$174~~$124 on ~~December 31, 2017~~September 30, 2020 and March 31, ~~2017,~~2020, respectively, related to the self-insured medical plan is primarily based upon claim history and is included in the caption “Accrued compensation” as a current liability in the Condensed Consolidated Balance Sheets.

The Company has been named as a defendant in lawsuits alleging personal injury from exposure to asbestos allegedly contained in, or accompanying, 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 in the Company’s current lawsuits are similar to those made in previous asbestos-related suits that named the Company as a 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. The Company cannot provide any assurances that any pending or future matters will be resolved in the same manner as previous lawsuits.

As of ~~December 31, 2017,~~September 30, 2020, 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, legal proceedings or potential claims to which the Company is, or may become, a party to cannot be determined and an estimate of the reasonably possible loss or range of loss cannot be made for the majority of the claims, management does not believe that the outcomes, either individually or in the aggregate, will have a material adverse 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. The Company is subject to U.S. federal examination for the tax years ~~2015~~2016 through ~~2017~~2019 and examination in state tax jurisdictions for the tax years ~~2013~~2015 through ~~2017.~~2019. The Company is subject to examination in the People’s Republic of China for tax years ~~2014~~2016 through ~~2016.~~2019 and in India for tax year 2019.

There was no0 liability for unrecognized tax benefits at either ~~December 31, 2017~~September 30, 2020 or March 31, ~~2017.~~

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law. The Tax Act, which is effective on January 1, 2018, significantly revises the U.S. tax code by, among other changes, lowering the corporate income tax rate from 35% to 21%, requiring a one-time transition tax on accumulated foreign earnings of certain foreign subsidiaries that were previously tax deferred and creating new taxes on certain foreign sourced earnings. At December 31, 2017, the Company has not completed its accounting for the tax effects of the Tax Act; however, the Company has made a reasonable estimate of the effects on its existing deferred tax balances and the one-time transition tax.

The Company remeasured certain U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%, and provisionally recorded an income tax benefit of $1,575 related to such remeasurement in the third quarter of fiscal 2018. The Company is still analyzing certain aspects of the Tax Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts.

The one-time transition tax is based on the total post-1986 earnings and profits (“E&P”) of our foreign subsidiary that has previously been deferred from U.S. income taxes. The Company recorded a provisional amount for its one-time transition liability of its foreign subsidiary resulting in additional income tax expense of $137 in the third quarter of fiscal 2018. The Company has not yet completed its calculation of the total post-1986 foreign E&P for the foreign subsidiary. The transition tax is based in part on the amount of those earnings held in cash and other specified assets. The amount may change when the Company finalizes the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets.

The changes in accumulated other comprehensive loss by component for the ~~nine~~six months ended ~~December 31, 2017~~September 30, 2020 and ~~2016~~2019 are as follows:

	Pension and Other Postretirement Benefit Items			Foreign Currency Items		Total			Pension and Other Postretirement Benefit Items			Foreign Currency Items			Total
Balance at April 1, 2017	$	(8,439	)	$	5	$	(8,434	)
Balance at April 1, 2020									$	(9,472	)	$	(84	)	$	(9,556	)
Other comprehensive income before reclassifications		—			216		216			—			155			155
Amounts reclassified from accumulated other comprehensive loss		619			—		619			409			—			409
Net current-period other comprehensive income		619			216		835			409			155			564
Balance at December 31, 2017	$	(7,820	)	$	221	$	(7,599	)
Balance at September 30, 2020									$	(9,063	)	$	71		$	(8,992	)

Pension and
Other
Postretirement
Benefit Items

Foreign
Currency
Items

Total

Balance at April 1, 2016

$
(10,932
)

$
256

$
(10,676
)
Other comprehensive income before reclassifications

—

(283
)

(283
)
Amounts reclassified from accumulated other comprehensive
loss

674

—

674

Net current-period other comprehensive income

674

(283
)

391

Balance at December 31, 2016

$
(10,258
)

$
(27
)

$
(10,285
)

	Pension and Other Postretirement Benefit Items			Foreign Currency Items			Total
Balance at April 1, 2019	$	(8,947	)	$	114		$	(8,833	)
Other comprehensive loss before reclassifications		—			(223	)		(223	)
Amounts reclassified from accumulated other comprehensive loss		389			—			389
Net current-period other comprehensive income (loss)		389			(223	)		166
Balance at September 30, 2019	$	(8,558	)	$	(109	)	$	(8,667	)

The reclassifications out of accumulated other comprehensive loss by component for the three and ~~nine~~six months ended ~~December 31, 2017~~September 30, 2020 and ~~2016~~2019 are as follows:

Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss								Affected Line Item in the Condensed Consolidated Statements of Income and Retained Earnings	Amount Reclassified from Accumulated Other Comprehensive Loss								Affected Line Item in the Condensed Consolidated Statements of Income
	Three Months Ended									Three Months Ended
	December 31,									September 30,
	2017				2016					2020				2019
Pension and other postretirement benefit items:
Amortization of actuarial loss	$	(262	)	⁽¹⁾	$	(348	)	⁽¹⁾	Income before provision for income taxes	$	(267	)	⁽¹⁾	$	(249	)	⁽¹⁾	Income before provision for income taxes
		17				(123	)		Provision for income taxes		(63	)			(54	)		Provision for income taxes
	$	(279	)		$	(225	)		Net income	$	(204	)		$	(195	)		Net income

Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss								Affected Line Item in the Condensed Consolidated Statements of Income and Retained Earnings	Amount Reclassified from Accumulated Other Comprehensive Loss								Affected Line Item in the Condensed Consolidated Statements of Income
	Nine Months Ended									Six Months Ended
	December 31,									September 30,
	2017				2016					2020				2019
Pension and other postretirement benefit items:
Amortization of actuarial loss	$	(788	)	⁽¹⁾	$	(1,043	)	⁽¹⁾	Income before provision for income taxes	$	(533	)	⁽¹⁾	$	(498	)	⁽¹⁾	Income before provision for income taxes
		(169	)			(369	)		Provision for income taxes		(124	)			(109	)		Provision for income taxes
	$	(619	)		$	(674	)		Net income	$	(409	)		$	(389	)		Net income

~~In each~~On June 24, 2019, the Company completed the sale of its subsidiary, Energy Steel & Supply Co., to Hayward Tyler, a division of Avingtrans PLC, a global leader in performance-critical pumps and motors for the energy sector. Under the terms of the ~~second~~stock purchase agreement, the Company received proceeds of $602, subject to certain adjustments, including a customary working capital adjustment. The Company recognized a loss on the disposal of $87 in the first quarter of fiscal ~~2018 and~~2020. In addition, during the first ~~half~~quarter of fiscal ~~2017,~~2020, the ~~Company’s workforce was aligned with market conditions by reducing~~Company incurred a bad debt charge of $98 and an inventory write down of $338 related to the ~~number~~bankruptcy of ~~management, office and manufacturing positions. As a result, restructuring charges~~Westinghouse Electric Company. All of ~~$316 and $630 were recognized in the nine months ended December 31, 2017 and 2016, respectively. The restructuring charges included severance and related employee benefit costs. The charges~~these items are included in the ~~caption “Restructuring Charge”~~line item “Other expense” in the Condensed Consolidated ~~Statements~~Statement of Income ~~and Retained Earnings. The reconciliation of~~for the ~~changes in the restructuring reserve is as follows:~~

~~The liability of $100 and $120 at December 31, 2017 and March 31, 2017 respectively, is included in the caption “Accrued Compensation” in the Condensed Consolidated Balance Sheets.~~ six months ended September 30, 2019.

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

In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers." This guidance establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from a company’s contracts with customers. The guidance requires companies to apply a five-step model when recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. The guidance also includes a comprehensive set of disclosure requirements regarding revenue recognition. The guidance allows two methods of adoption: (1) a full retrospective approach where historical financial information is presented in accordance with the new standard and (2) a modified retrospective approach where the guidance is applied to the most current period presented in the financial statements. In August 2015, the FASB issued ASU No 2015-14 "Revenue from Contracts with Customers: Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, with earlier application permitted as of annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," to clarify the implementation guidance on principal versus agent. In April 2016, the FASB issued ASU No. 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," which clarifies the identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients," which clarifies the implementation guidance related to collectability, presentation of sales tax, noncash consideration, contract modifications and completed contracts at transition. The Company plans to adopt these standards using the modified retrospective approach in the first quarter of its fiscal year ending March 31, 2019. The Company has developed a project plan and is currently reviewing its contracts and evaluating the impact of the guidance on its revenue. The Company currently believes that the most significant impact of adopting the guidance will be the timing of revenue recognition. The Company believes that revenue on the majority of its contracts will continue to be recognized upon shipment while revenue on its larger contracts are expected to be recognized over time as these contracts meet specific criteria established in the new standards. The Company is in the process of implementing changes to its business processes, systems and controls to support the recognition and disclosure requirements under the new guidance. See Note 2 for a description of the Company’s current revenue recognition policy.

In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory," which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted the new guidance in the first quarter of fiscal 2018. The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)", which requires companies to recognize all leases as assets and liabilities on the consolidated balance sheet. This ASU retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting guidance. As a result, the effect of leases on the consolidated statement of comprehensive income and the consolidated statement of cash flows is largely unchanged from previous generally accepted accounting principles. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company believes the adoption of this ASU may have a material impact on its assets and liabilities due to the addition of right-of-use assets and lease liabilities to its Consolidated Balance Sheet, however, it does not expect the guidance to have a material impact on its Consolidated Statement of Income or Consolidated Statement of Cash Flows.

In March 2016, the FASB issued ASU 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. The Company adopted the new guidance in the first quarter of fiscal 2018. The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.

In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230)", which clarifies the presentation and classification of eight specific issues on the cash flow statement. This ASU is effective for public businesses for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not expect the adoption of this ASU will have a material effect on its Consolidated Financial Statements.

In March 2017, the FASB issued ASU No. 2017-07, "Compensation-Retirement Benefits (Topic 715)", which amended its guidance related to the presentation of net periodic pension cost and net periodic postretirement benefit cost. The amended guidance requires the service cost component be disaggregated from the other components of net benefit cost. The service cost component of expense is required to be reported in the income statement in the same line item as other compensation costs within income from operations. The other components of net benefit cost are required to be presented separately from the service cost component outside of income from operations. This ASU is effective for public businesses for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Financial Statements.

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

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

We are a global business that designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. Our energy markets include oil refining, cogeneration, ~~nuclear~~ and alternative power. For the defense industry, our equipment is used in nuclear propulsion power systems for the U.S. Navy. For the chemical and petrochemical industries, our equipment is used in fertilizer, ethylene, methanol and downstream chemical facilities.

~~Graham’s~~Our global brand is built upon our world-renowned engineering expertise in vacuum and heat transfer technology, responsive and flexible service and high quality standards. We design and manufacture custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. We are also a leading nuclear code accredited fabrication and specialty machining company. We supply components used inside reactor vessels and outside containment vessels of nuclear power facilities. Our equipment can also be found in other diverse applications such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, and heating, ventilating and air conditioning.

Our corporate headquarters are located in Batavia, New York. We have production facilities co-located with our headquarters in ~~Batavia and also at our wholly-owned subsidiary, Energy Steel & Supply Co. ("Energy Steel"), located in Lapeer, Michigan.~~Batavia. We also have a wholly-owned foreign ~~subsidiary,~~subsidiaries, Graham Vacuum and Heat Transfer Technology (Suzhou) Co., Ltd. ("GVHTT"), located in Suzhou, ~~China.~~China and Graham India Private Limited ("GIPL"), located in Ahmedabad, India. GVHTT provides sales and engineering support for us in the ~~People’s~~People's Republic of China and management oversight throughout Southeast Asia. GIPL serves as a sales and market development office focusing on the refining, petrochemical and fertilizer markets in India.

In the first quarter of the fiscal year ended March 31, 2020 (which we refer to as "fiscal 2020"), we completed the sale of our commercial nuclear utility business, Energy Steel and Supply Co. ("Energy Steel").

Our current fiscal year (which we refer to as ~~“fiscal 2018”~~"fiscal 2021") ends March 31, ~~2018.~~

Highlights for the three and ~~nine~~six months ended ~~December 31, 2017~~September 30, 2020 include:

This report and other documents we file with the Securities and Exchange Commission include ~~“forward-looking statements”~~"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 ~~2017.~~2020.

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

•~~sources of revenue and anticipated revenue, including the contribution from anticipated growth;~~

•~~expectations regarding achievement of revenue and profitability expectations;~~

•~~plans for future products and services and for enhancements to existing products and services;~~

Forward-looking statements are usually accompanied by words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "may," "might," "intend," "interest," "appear," "expect," "suggest," "plan," "predict," "project," "encourage," ~~"potential", "view"~~"potential," "should," "view," "will," 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 continue to operate within disrupted energy and petrochemical markets (which we refer to as our “commercial markets”). A slowdown in our commercial markets began during the latter part of fiscal 2020. This slowdown was primarily caused

by an excess supply of crude oil, which had a negative impact on commodity pricing. The economic slowdown and corresponding reductions in demand for transportation fuel and petrochemical products caused by the ongoing COVID-19 global pandemic further adversely affected our commercial markets. As a result of ~~volatility~~this combination of adverse supply-side and demand-side disruptions, our commercial customers have significantly reduced their operating budgets for products and services like those that we offer. The timing and catalyst for a recovery in our commercial markets remains uncertain and we believe that in the near term the quantity of projects available for us to compete for will be fewer and that the pricing environment will continue to be challenging.

Over the long-term, however, we expect that population growth, an expanding global middle class and an increasing desire for more industrial products will drive increased demand for chemical and petrochemical products. Moreover, once global economies return to stable growth, we expect investment in new global chemical and petrochemical capacity will resume and that such investments will drive growth in demand for our products and services.

Energy markets, in particular crude oil ~~and natural gas prices, and near term price uncertainty, our global~~refining, are undergoing a more fundamental evolution. We believe that systemic changes in the energy markets ~~have been~~are being driven, in ~~a contracted state for~~part, by the ~~past three years. In response to the market conditions, our customers~~increasing use by consumers of alternative fuels in ~~the downstream energy sector have sharply reduced capital spending in each~~lieu of the last three years. This impacted not only new capacity, but also revamping and turnaround for routine maintenance. Oil prices have risen over the past six months from $45 to over $60 per barrel.fossil fuel. As a result, ~~certain projects~~we anticipate demand growth for fossil-based fuels will be less than the global GDP growth rate and that crude oil refiners will focus new investments toward the installed base, and that inefficient refineries will close and new refining capacity will be co-located where fuels and petrochemicals are produced. We also anticipate that future investment by refiners in renewable fuels (e.g., renewable diesel), in existing refineries (e.g., to expand feedstock processing flexibility, improve conversion of oil to refined products) to gain greater throughput, or to build new capacity (e.g., integrated refineries with petrochemical products capabilities) will continue to drive demand for our ~~equipment is utilized have begun to proceed, however, it is not clear whether a sustained capital spending recovery in our markets has begun.~~products and services.

~~Capital spending~~Demand for our products in the ~~nuclear market for both new capacity and~~defense industry is related to ~~maintain existing facilities continues to trend downward. Capital spending in~~ the nuclear market is down 25% to 35% compared with 3 to 4 years ago, according to a report from the Nuclear Energy Institute. Additionally, the March 2017 bankruptcy filing by Westinghouse Electric Company (“Westinghouse”) and the decision to cease building the two new reactors located in Summer, South Carolina has dramatically impacted the health of the

~~domestic nuclear market. The contracted capital spending within the commercial nuclear power market has had the effect of measurably reducing new orders and consequently reducing our sales.~~

Our long-term view for the refining and petrochemical markets is that fundamentals will drive increasing demand. These fundamentals include rising populations, strong emerging market economic growth, and overall global economic expansion, which we believe will result in capital investment necessary to satisfy increasing global energy demand.

~~Our~~ naval nuclear propulsion market ~~has demand~~which is tied to aircraft carrier and submarine vessel construction schedules of the primary shipyards ~~who service~~contracted by the U.S. Navy. We expect growth in our naval nuclear propulsion business ~~based on~~will result from our strategic actions to increase our market share, our successful performance, and expected ~~demand. For more information, refer to~~demand increases. The economic slowdown caused by the ~~heading "Strategy and Outlook" within this Item 2 of this Quarterly Report on Form 10-Q.~~

InCOVID-19 pandemic has not adversely effected demand for our products or services in the ~~near term, given the current market conditions, new order levels are expected to remain volatile from quarter to quarter.~~ naval market.

The chart below shows the impact of our successful diversification ~~strategy. Nearly 60%~~strategy into multiple U.S. Navy defense platforms. Our U.S. Navy defense business, which began with our entry into the nuclear carrier program and expanded into both the Virginia and Columbia class nuclear submarine programs, made up 50% of our total backlog at September 30, 2020. Each vessel platform has made up at least 10% of our total backlog for the past three years. We believe this diversification is especially beneficial when our commercial markets are weak, as ~~of December 31, 2017~~ is ~~from markets not served by us in~~presently the ~~Fiscal 2007-2009 time frame.~~case.

Backlog Mix Illustrating Impact of Diversification Strategies
Backlog ($ million) at FYE*

To better understand the significant factors that influenced our performance during the periods presented, 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						Nine Months Ended						Three Months Ended						Six Months Ended
	December 31,						December 31,						September 30,						September 30,
	2017			2016			2017			2016			2020			2019			2020			2019
Net sales	$	17,281		$	22,654		$	55,356		$	66,145		$	27,954		$	21,643		$	44,664		$	42,236
Gross profit	$	3,585		$	6,301		$	12,281		$	15,422		$	7,693		$	4,948		$	9,261		$	9,662
Gross profit margin		21	%		28	%		22	%		23	%		28	%		23	%		21	%		23	%
SG&A expense ⁽¹⁾	$	4,066		$	3,804		$	11,447		$	10,637		$	4,253		$	3,847		$	8,155		$	8,414
SG&A as a percent of sales		24	%		17	%		21	%		16	%		15	%		18	%		18	%		20	%
Net (loss) income	$	(11,622	)	$	1,840		$	(10,677	)	$	3,222
Diluted (loss) income per share	$	(1.19	)	$	0.19		$	(1.09	)	$	0.33
Net income													$	2,744		$	1,205		$	926		$	1,287
Diluted income per share													$	0.27		$	0.12		$	0.09		$	0.13
Total assets	$	138,623		$	148,328		$	138,623		$	148,328		$	144,622		$	146,464		$	144,622		$	146,464
Total assets excluding cash, cash equivalents and investments	$	64,441		$	75,651		$	64,441		$	75,651		$	76,766		$	72,668		$	76,766		$	72,668

The ~~Third~~Second Quarter and First ~~Nine~~Six Months of Fiscal ~~2018~~2021 Compared With the ~~Third~~Second Quarter and First ~~Nine~~Six Months

Sales for the ~~third~~second quarter of fiscal ~~2018~~2021 were ~~$17,281,~~$27,954, a ~~24% decrease as~~29% increase compared with ~~sales of $22,654~~$21,643 for the ~~third~~second quarter of fiscal ~~2017.~~2020. Our domestic sales, as a percentage of aggregate product sales, were ~~65%~~62% in the ~~third~~second quarter of fiscal ~~2018~~2021 compared with ~~77%~~73% in the ~~third~~second quarter of fiscal ~~2017.~~2020. Domestic sales year-over-year ~~decreased $6,160,~~increased $1,521, or ~~35%~~10%. International sales increased ~~$787,~~$4,790, or ~~15%~~81%, in the ~~third~~second quarter of fiscal ~~2018~~2021 compared with the ~~third~~second quarter of fiscal ~~2017.~~2020. Sales in the three months ended ~~December 31, 2017~~September 30, 2020 were 31% to the refining industry, 24% to the chemical and petrochemical industries, 10% to the power industry, including the nuclear market, and 35% to other commercial and industrial applications, including the U.S. Navy. Sales in the three months ended December 31, 2016 were 28%37% to the refining industry, 19% to the chemical and petrochemical industries, ~~19% to~~34% for the ~~power~~defense (U.S. Navy) industry, ~~including the nuclear market,~~ and ~~34%~~10% to other commercial and industrial ~~applications, including~~applications. Sales in the ~~U.S. Navy. Fluctuations~~three months ended September 30, 2019 were 29% to the refining industry, 48% to the chemical and petrochemical industries, 12% for the defense (U.S. Navy) industry, and 11% to other commercial and industrial applications. Fluctuation in sales among markets, products and geographic locations ~~can vary measurably~~varies, sometimes significantly, from quarter-to-quarter based on timing, quantity, and ~~magnitude~~value of projects. See also "Current Market Conditions," above. For additional information on anticipated future sales and our markets, see "Orders and Backlog" below.

Sales for the first ~~nine~~six months of fiscal ~~2018~~2021 were ~~$55,356, a decrease~~$44,664, an increase of ~~$10,789,~~$2,428, or ~~16%~~6% compared with ~~sales of $66,145~~$42,236 for the first ~~nine~~six months of fiscal ~~2017. The decrease in fiscal 2018 year-to-date sales was due to weaker domestic sales.~~2020. Our domestic sales, as a percentage of aggregate product sales, were ~~67%~~60% in the first ~~nine~~six months of fiscal ~~2018~~2021 compared with ~~74%~~71% in the same period in fiscal ~~2017.~~2020. Domestic sales decreased ~~$11,900,~~$3,489, or ~~24%~~12%, while international sales increased by ~~$1,111,~~$5,917, or ~~7%.~~49%, each as compared with the same prior year period. International sales accounted for ~~33%~~40% and ~~26%~~29% of total sales for the first ~~nine~~six months of fiscal ~~2018~~2021 and fiscal ~~2017,~~2020, respectively. Sales in the ~~first nine~~six months ~~of fiscal 2018~~ended September 30, 2020 were ~~25%~~29% to the refining industry, 30% to the chemical and petrochemical industries, ~~14% to~~29% for the ~~power~~defense industry ~~including the nuclear market,~~(U.S. Navy), and ~~31%~~12% to other commercial and industrial ~~applications, including the U.S. Navy.~~applications. Sales in the ~~first nine~~six months ~~of fiscal 2017~~ended September 30, 2019 were ~~31%~~33% to the refining industry, ~~22%~~42% to the chemical and petrochemical industries, ~~23% to~~11% for the ~~power~~defense (U.S. Navy) industry, ~~including the nuclear market,~~ and ~~24%~~14% to other commercial and industrial ~~applications, including the U.S. Navy.~~applications.

~~Our gross~~Gross profit margin for the ~~third~~second quarter of fiscal ~~2018~~2021 was ~~21%~~28% compared with ~~28%~~23% for the ~~third~~second quarter of fiscal ~~2017.~~2020. Gross profit for the ~~third~~second quarter of fiscal ~~2018 decreased 43%~~2021 increased 55% compared with fiscal ~~2017,~~2020, to ~~$3,585~~$7,693 from ~~$6,301. Gross~~$4,948. The increase in gross profit was ~~impacted~~driven by ~~lower sales~~higher volume, which was due to increased throughput at our Batavia facility, as well as, accelerated conversion at our global fabrication partner’s facilities and ~~margins were impacted by~~the completion of a ~~weaker mix of projects and less cost absorption.~~materials only order.

~~Our gross~~Gross profit margin for the first ~~nine~~six months of fiscal ~~2018~~2021 was ~~22%~~21% compared with 23% for the first ~~nine~~six months of fiscal ~~2017.~~2020. Gross profit for the first ~~nine~~six months of fiscal ~~2018~~2021 decreased ~~20%~~4% compared with the first six months of fiscal ~~2017,~~2020, to ~~$12,281~~$9,261 from ~~$15,422. The decrease~~$9,662. Gross profit margin in ~~gross profit~~the first six months of fiscal 2021 was ~~due to lower volume.~~adversely impacted by the underutilization of our Batavia facility in the first quarter as a result of the COVID-19 pandemic.

SG&A expenses as a percent of sales for the three and ~~nine-month~~six-month periods ended ~~December 31, 2017~~September 30, 2020 were ~~24%~~15% and ~~21%~~18%, respectively. SG&A expenses in the ~~third~~second quarter of fiscal ~~2018~~2021 were ~~$4,066,~~$4,253, an increase of ~~$262, or 7%,~~$406 compared with SG&A expenses of $3,847 in the ~~third~~second quarter of fiscal 2017 SG&A expenses of $3,804, due to bad debts in the commercial nuclear power market. Excluding the commercial nuclear power market bad debts, SG&A expenses were $3,832, or 22% of sales in the third quarter of fiscal 2018.2020. SG&A expenses in the first ~~nine~~six months of fiscal ~~2018~~2021 were ~~$11,447, an increase~~$8,155, a decrease of ~~$810, or 8%,~~$259 compared with SG&A expenses of $8,414 in the first ~~nine~~six months of fiscal 2017 SG&A expenses of $10,637. This increase was principally related to the benefit of insurance proceeds of $759 received in the prior year and the $234 bad debt in the commercial nuclear power market in the current three-month period, as described below. Excluding these two items, SG&A expenses were $183, or 2%, lower.

During the third quarter of fiscal 2018, we performed our annual goodwill and intangible asset impairment review. We estimated the fair value of intangible assets and goodwill of our commercial nuclear power business related to the December 2010 acquisition of Energy Steel & Supply Co. (“Energy Steel”). The impairment review indicated that the fair value of the permits, tradename and goodwill of the business were substantially lower than the carrying value due to reduced investment from the U.S. nuclear power market, the strength of the Energy Steel brand relative to larger more vertically integrated suppliers, and the bankruptcy of Westinghouse which resulted in the stoppage of work at the Summer, SC nuclear facility. As a result, in the third quarter of fiscal 2018 we recorded impairment losses of $8,600, $500, and $5,716 for permits, tradename and goodwill, respectively. The total impairment charge was $14,816 before taxes and $12,852 after taxes. Additionally, we incurred a $46 revenue reversal, and a $234 bad debt charge, related to the bankruptcy of Westinghouse and the stoppage of work at the Summer, SC nuclear facility. The total before and after tax cost of these two charges was $280 and $208, respectively. Additionally, we recognized a gain of $1,416 related to the revaluation of deferred tax liabilities, which were impacted by the reduction in federal income tax rates from the Tax Act. The deferred tax gain of $1,438 included $2,034 for adjusting the rates on the deferred tax liability of the Energy Steel acquisition offset by a charge of $596 for other tax items.

~~Prior to the third quarter,~~2020. Included in the first ~~half~~six months of fiscal ~~2018, we incurred a pre-tax restructuring charge of $316 ($224 after tax)~~2020, was $621 for ~~severance costs related to certain headcount reductions. In~~ the first half of fiscal 2017, we incurred a pre-tax restructuring charge of fiscal 2017 was $630 ($441 after tax) related to certain headcount reductions. The reduction in headcount in the first half of fiscal 2018 was approximately 6% of our global workforce. The annual savings from these reductions is expected to be $1,500. Approximately half of the savings should be realized in fiscal 2018.divested commercial nuclear utility business.

Interest income for the three and ~~nine-month~~six-month periods ended ~~December 31, 2017~~September 30, 2020 was ~~$142~~$26 and ~~$455,~~$120, respectively, compared with ~~$100~~$363 and ~~$272,~~$762, respectively, for the same periods ended ~~December 31, 2016.~~September 30, 2019. The decrease in interest income is due to market investment rates, which are significantly lower when compared with rates a year ago. Interest expense for the three and ~~nine-month~~six-month periods ended ~~December 31, 2017~~September 30, 2020 was $3 and $8, respectively, compared with $3$4 and $7, respectively, for the same periods ended ~~December 31, 2016.~~September 30, 2019.

~~The reduction in the year-to-date~~Our effective tax rate ~~from 28%~~for each of the three and six-month periods ended September 30, 2020 was 22% and 30%, respectively. The effective tax rate for each of the three and six-month periods ended September 30, 2019 was 22%. The higher six-month tax rate in fiscal 2021 was due to the ~~second quarter to 23% in the third quarter as well as~~loss we incurred in the first nine months of fiscal 2018 was due primarily to adjustments related to the Tax Act. The effective tax rates for the comparable three and nine month periods of fiscal 2017 were 29% and 27%, respectively.

~~Net (loss) income and (loss) income per diluted share for the third~~ quarter of fiscal ~~2018 were ($11,622) and ($1.19), compared with $1,840 and $0.19, respectively,~~2021. Our effective tax rate for the ~~third quarter of~~full fiscal ~~2017. Excluding impairment and other related charges for our commercial nuclear business as well as the gain from implementation of the Tax Act, net~~year is expected to be closer to 22%.

Net income and income per diluted share for the ~~third~~second quarter of fiscal ~~2018~~2021 were ~~($1)~~$2,744 and ~~$0.00,~~$0.27, respectively, compared with $1,205 and ~~were $1,840 and $0.19~~$0.12, respectively, in the ~~third~~second quarter of fiscal ~~2017.~~2020. Net ~~(loss)~~ income and ~~(loss)~~ income per diluted share for the first ~~nine~~six months of fiscal ~~2018~~2021 were ~~($10,677)~~$926 and ~~($1.09),~~$0.09, respectively, compared with net income of ~~$3,222~~$1,287 and income per diluted share of ~~$0.33~~$0.13 for the first ~~nine~~six months of fiscal ~~2017. Excluding the items noted above as well as restructuring charges~~2020. Included in ~~each year,~~ net income and income per diluted share for the first ~~nine~~six months of fiscal ~~2018 were $1,168~~2020 was a loss of $893 and ~~$0.12,~~$0.09, respectively, ~~and were $3,663 and $0.38~~for our commercial nuclear utility business, which was sold in the first ~~nine months~~quarter of fiscal ~~2017.~~

The following discussion should be read in conjunction with our Condensed Consolidated Balance Sheets and ~~Condensed Consolidated~~ Statements of Cash Flows:

	December 31,		March 31,		September 30,			March 31,
	2017		2017		2020			2020
Cash and investments	$	74,182	$	73,474	$	67,856		$	73,003
Working capital		78,369		78,688		77,546			77,443
Working capital ratio⁽¹⁾		3.3		3.5		2.7			2.6
Working capital excluding cash and investments		4,187		5,214		9,690			4,440
Working capital excluding cash and investments as a percent of net sales⁽²⁾						10.4	%		4.9	%

Net cash ~~generated~~used by operating activities for the first ~~nine~~six months of fiscal ~~2018~~2021 was ~~$3,874,~~$2,258, compared with ~~$10,707~~cash usage of $1,915 for the first ~~nine~~six months of fiscal ~~2017.~~2020. The ~~decrease in~~ cash ~~generation~~usage comparison year over year was attributable primarily to ~~lower earnings,~~ an increase in accounts receivable, anmostly offset by a decrease in unbilled revenue due to timing. The increase in ~~income taxes receivable~~working capital excluding cash and investments as a ~~smaller decrease in inventories, partly offset by higher unbilled revenue.~~percent of net sales was due to timing of working capital.

Dividend payments and capital expenditures in the first ~~nine~~six months of fiscal ~~2018~~2021 were ~~$2,638~~$2,195 and ~~$543,~~$797, respectively, compared with ~~$2,616~~$2,075 and ~~$241,~~$679, respectively, for the first ~~nine~~six months of fiscal ~~2017.~~2020.

Capital expenditures for fiscal ~~2018~~2021 are expected to be between approximately ~~$1,500~~$2,000 and $2,500. We have a capital project for approximately $1,500 which will be completed in the next few months, however, it is not clear whether the payments will occur in this fiscal year or early in next fiscal year. Approximately 80% of our fiscal 2018 capital expenditures are expected to be for productivity-enhancing machinery and equipment, with the remaining amounts expected to be used for information technology upgrades and other items.

Cash and investments were ~~$74,182~~$67,856 on ~~December 31, 2017~~September 30, 2020 compared with ~~$73,474~~$73,003 on March 31, ~~2017, up $708.~~2020, down $5,146.

We invest net cash generated from operations in excess of cash held for near-term needs in short-term, less than 365 days, certificates of deposit, money market accounts or 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, which reduces our cost on those letters of credit. Approximately 95% of our cash and investments are held in the U.S. The remaining 5% is invested in our China operations.

Our revolving credit facility with JP Morgan Chase, N.A. ("JP Morgan Chase") provides us with a line of credit of $25,000, including letters of credit and bank guarantees. In addition, our JP Morgan Chase 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 this credit facility are secured by all of our assets. We ~~also~~ have a ~~$5,000 unsecured~~$14,000 line of credit with HSBC, N.A. ("HSBC") secured by certain of our deposit accounts with HSBC. Letters of credit outstanding on ~~December 31, 2017~~September 30, 2020 and March 31, ~~2017~~2020 were ~~$7,401~~$17,161 and ~~$8,372,~~$13,328, respectively. The outstanding letters of credit as of ~~December 31, 2017~~September 30, 2020 were issued by JP Morgan Chase ~~HSBC, as well as Bank of America (under our previous credit facility).~~and HSBC. There were no other amounts outstanding on our credit facilities at ~~December 31, 2017~~September 30, 2020 and March 31, ~~2017.~~2020. The borrowing rate under our JP Morgan Chase facility as of ~~December 31, 2017~~September 30,

2020 was the bank’s prime rate, or ~~4.50%~~3.25%. Availability under the JP Morgan Chase and HSBC lines of credit was ~~$25,168~~$21,839 and ~~$25,761~~$21,672, respectively, at ~~December 31, 2017~~September 30, 2020 and March 31, ~~2017,~~2020, respectively. We believe that cash generated from operations, combined with our investments and available financing capacity under our credit facility, will be adequate both to meet our cash needs for the immediate future and to support our growth strategies.

Orders for the three-month period ended ~~December 31, 2017~~September 30, 2020 were ~~$40,528~~$34,974, net of a change order reduction of $1,264, compared with ~~$17,699~~$32,552 for the same period ~~in the prior year, an increase of 129%.~~last year. Orders represent written communications received from customers requesting us to supply products and/or services. Domestic orders were ~~47%~~46% of total orders, or ~~$19,144,~~$16,117, and international orders were ~~53%~~54% of total orders, or ~~$21,384,~~$18,857, in the ~~current~~second quarter of fiscal 2021 compared with the ~~third~~second quarter of fiscal ~~2017,~~2020 when domestic orders were ~~59%~~33%, or ~~$10,396,~~$10,759, of total orders, and international orders were ~~41%~~67%, or ~~$7,303,~~$21,793, of total orders. ~~Over 80% of the international orders in the third quarter of fiscal 2018 were from Canada.~~

During the first ~~nine~~six months of fiscal ~~2018,~~2021, orders were ~~$68,679,~~$46,442, compared with ~~$57,123~~$47,641 for the same period of fiscal ~~2017, an increase~~2020. Domestic orders were 42% of ~~$11,556,~~total orders, or ~~20%. For~~$19,349, and international orders were 58% of total orders, or $27,093, in the first ~~nine~~six months of fiscal ~~2018, refining~~2021 compared with the same period of fiscal 2020 when domestic orders ~~increased by $19,121, power~~were 46%, or $21,916, of total orders, ~~increased $812, chemical~~ and petrochemical decreased by $6,167 and other commercial and industrial applications, including the U.S. Navy, decreased by $2,210. See “Current Market Conditions” above for additional information.

Backlog was ~~$96,246 at December 31, 2017, compared with $72,981~~$114,851 at September 30, ~~2017, a 32% increase.~~2020, compared with $107,220 on June 30, 2020, and $112,389 at March 31, 2020. Backlog is defined as the total dollar value of orders received for which revenue has not yet been recognized. Approximately ~~55%~~60% to ~~60%~~65% of orders currently in our backlog are expected to be converted to sales within one ~~year, 5% to 10% are expected to ship between 12 and 24 months, and 25% to 35% beyond two years.~~year. The majority of the ~~orders~~backlog that ~~are~~is expected to convert beyond twelve months ~~are~~is for the defense industry, specifically the U.S. Navy. At ~~December 31, 2017, 35%~~September 30, 2020, 37% of our backlog was attributable to equipment for refinery project work, 4%9% for chemical and petrochemical projects, 6%50% for ~~power~~defense (U.S. Navy) projects ~~including nuclear, 51%~~and 4% for other commercial and industrial applications. At September 30, 2019, 32% of our backlog was attributable to equipment for refinery project work, 16% for chemical and petrochemical projects, 48% for U.S. Navy projects and 4% for power and other industrial applications. We had two projects totaling $3,165 cancelled in fiscal 2020 and a third project of $654 cancelled in the first six months of fiscal 2021. At ~~December 31, 2016, 17%~~September 30, 2020, we had two projects totaling $562 on hold.

Capital spending in the energy markets we serve began to decrease during the second half of fiscal 2020 and the pace of activity materially contracted as COVID-19 became a global pandemic in the fourth quarter of fiscal 2020. The weak energy markets have continued into fiscal 2021 and are particularly evident in our North American markets. As a result, our overall bidding activity has slowed. There has also been a shift toward more opportunities in emerging markets. At September 30, 2020, 50% of our backlog was ~~attributed to equipment~~ for ~~refinery project work, 14%~~the defense industry, specifically the U.S. Navy. Our pipeline for ~~chemical and petrochemical projects, 9% for power projects, 57% for~~the U.S. Navy ~~projects~~continues to be robust, but quarterly fluctuations in order levels will occur due to the size and ~~3% for other industrial applications. At December 31, 2017, we had no projects on hold.~~timing of release of the U.S. Navy projects. Defense programs in backlog are planned to deliver $20 to $30 million per year of revenue in fiscal 2021 and beyond.

~~Prolonged weakness~~Near term opportunities in the global energy and petrochemical markets ~~has continued to negatively impact our business in fiscal 2018. Our oil refining and chemical market customer spending has started to improve compared with last year, but this will~~ have ~~no effect on our fiscal 2018 sales. We anticipate that the nuclear power market will continue to be weak and unpredictable during the next few years, and this determination led~~slowed significantly due to the ~~impairment~~combined impact of ~~our goodwill~~the COVID-19 pandemic and ~~intangible assets which~~the geopolitical imbalance of supply. Although we ~~recognized in~~do not know when the ~~third quarter.~~

~~Despite~~COVID-19 pandemic will end or when the ~~current downturn,~~supply imbalance will subside, we continue to believe that the energy and petrochemical markets provide long-term growth opportunities for our products and services. Coupled with our diversification strategy into the defense industry, we remain confident in our ability to achieve the long-term ~~potential~~goal of ~~the energy markets we serve. We intend to expand~~significantly growing our ~~participation and market share. We believe this anticipated long-term strength will support our strategy to significantly grow our business when the energy markets begin to recover.~~business. We have invested in capacity to serve our commercial ~~refining and chemical/petrochemical~~ customers as well as to expand the work we do for the U.S. Navy. ~~In addition~~We intend to ~~these organic growth~~

~~opportunities, we~~ continue to look for organic growth opportunities as well as acquisitions or other business ~~combinations~~combinations that we believe will allow us to expand our presence in both our existing and ancillary markets. ~~We are focused on growing our business, reducing earnings volatility, and further diversifying our business and product lines.~~

~~The prolonged contraction~~Our expectations for sales and profitability in fiscal 2021 assume that we are able to operate our production facility in Batavia, New York at or near normal capacity for the last two quarters of fiscal 2021 without any additional COVID-19 related reductions in production capacity. In our first quarter of fiscal 2021, our production capability was significantly reduced due to the COVID-19 pandemic. Our production was at approximately 50% of normal production across the first quarter of fiscal 2021. Our production capacity returned to a normal level in the ~~energy markets~~second quarter of fiscal 2021. Our outlook is based upon the assumption that we ~~serve continues~~are able to ~~cause near-term uncertainty, affecting~~operate our ~~outlook for fiscal 2018.~~production facility, have access to the global supply chain, including our subcontractors, with minimal or no disruptions, whether as a result of the COVID-19 pandemic or any other circumstances.

We project that approximately 60% to 65% of our $114,851 backlog at September 30, 2020 will convert to sales over the next twelve months. We expect ~~revenue~~the remaining backlog will convert beyond twelve months, which includes a combination of U.S. Navy orders that have a long conversion cycle (up to five years) as well as certain commercial orders, the conversion of which has been extended by our customers. We had two projects totaling $3,165 cancelled in fiscal ~~2018~~2020 and a third project of $654 cancelled in

the first six months of fiscal 2021. At September 30, 2020, we had two projects totaling $562 on hold by our customers. In addition, we have three projects which have been delayed by our customers due to COVID-19 and related energy market dynamics, and we therefore expect revenue of $4,118 to be ~~approximately $75,000.~~ delayed beyond fiscal 2021. None of these amounts changed during the second quarter of fiscal 2021.

We expect fiscal year 2021 revenue to be between $90,000 and $95,000, gross profit margin ~~in fiscal 2018~~ to be in the ~~21%~~22% to ~~22% range. We are experiencing the impact of lower pricing from orders received over the past year~~24% range and the under-utilization of our production facilities in fiscal 2018. We believe that production overhead absorption will be weak, which we expect in turn will put continued pressure on gross profit margins in our fourth quarter.

SG&A ~~during fiscal 2018 is expected~~expenses to be between ~~$15,000~~$17,000 and ~~$15,500.~~$17,500. We expect interest income to be de minimis, given the low market rates on short term cash and investments. Our effective tax rate during fiscal ~~2018, excluding the tax effect of the impairment loss and the one-time impact of the new Tax Act recorded in the third quarter,~~2021 is expected to be ~~between 24% and 26%,~~approximately 22%. This outlook incorporates the very challenged first quarter which we ~~have lowered due~~experienced as a result of the COVID-19 pandemic, and assumes that we are able to continue to operate near normal capacity for the ~~reduced federal corporate income tax rate. Fiscal 2018 will benefit from the~~last six months of fiscal ~~fourth quarter being taxed at a lower rate.~~ 2021.

~~We continue to~~Cash flow was negative in the first six months of fiscal 2021, however, we expect ~~operating~~positive cash flow infrom operations for the remainder of fiscal ~~2018 will be lower than fiscal 2017. Fiscal 2017 cash flow benefited from the build-up of customer deposits.~~

We have been named as a defendant in lawsuits alleging personal injury from exposure to asbestos allegedly contained in or accompanying 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 in our current lawsuits are similar to those made in 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, 2017,~~September 30, 2020, we are 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, legal proceedings or potential claims to which we are or may become a party cannot be determined and an estimate of the reasonably possible loss or range of loss cannot be made for the majority of the claims, 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 and establishment of operational milestones which are used to recognize revenue under the ~~percentage-of-completion method, fair value estimates of identifiable tangible and intangible assets acquired in business combinations,~~overtime recognition model, 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, ~~2017.~~2020.

We did not have any off balance sheet arrangements as of ~~December 31, 2017~~September 30, 2020 or March 31, ~~2017,~~2020, other than ~~operating leases and~~ letters of credit.

The principal market risks (i.e., the risk of loss arising from market changes) 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 three ~~months~~ and ~~nine~~six months ended ~~December 31, 2017~~September 30, 2020 were ~~35%~~38% and ~~33%~~40%, respectively, of total sales compared with ~~23%~~27% and ~~26%~~29%, respectively, for the same periods of fiscal ~~2017.~~2020. 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 three and ~~nine~~six months of ~~each of~~ fiscal ~~2018~~2021 and fiscal ~~2017,~~2020, all sales by us and our wholly-owned subsidiaries, for which we were paid, were denominated in the local currency of the respective subsidiary (U.S. dollars or Chinese RMB).

We have limited exposure to foreign currency purchases. In each of the ~~first~~ three and ~~nine~~six months ~~of fiscal 2018,~~ended September 30, 2020, our purchases in foreign currencies represented 1%2% of cost of products sold. In the ~~first~~ three and ~~nine~~six months ~~of 2017,~~ended September 30, 2019, our purchases in foreign currencies represented 2%0% and 3%1% of cost of products sold, respectively. 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 and purchase 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, 2017~~September 30, 2020 and March 31, ~~2017,~~2020, 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, responsive and flexible service, 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. ~~In market downturns, we typically experience depressed price levels. Moreover, the~~The cost of metals and other materials used in our products ~~have experienced~~can experience significant ~~volatility. Such factors, in addition to the global effects of the ongoing~~ volatility, and ~~disruption of the capital and credit markets, have resulted~~as such, can impact our ability to reflect this volatility in ~~downward demand and pricing pressure on~~ our ~~products.~~pricing.

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. 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 ~~December 31, 2017,~~September 30, 2020, we had notwo projects totaling $562 on ~~hold.~~hold by our customers.

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. We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our non-productive employees were working remotely during the majority of the first quarter due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

Except as stated below, there have been no material changes from the risk factors previously disclosed in Part I – Item 1A of the Company’s Form 10-K for the fiscal year ended March 31, 2020.

Our business, financial condition and results of operations have been and may continue to be adversely affected by global public health pandemics, including the ongoing COVID-19 pandemic.

Our business, financial condition and results of operations have been and may continue to be adversely affected if the COVID-19 pandemic, or another global health crisis, impacts our employees, suppliers, customers, financing sources or others’ ability to conduct business or negatively affects consumer and business confidence or the global economy. The COVID-19 pandemic has affected large segments of the global economy, including the markets we operate in, since the fourth quarter of fiscal 2020. In response to the COVID-19 pandemic, beginning in late March 2020, we reduced staffing at our facility in Batavia, New York. We began the first quarter of fiscal 2021 at 10% of normal staffing capacity and gradually increased to normal capacity by early June 2020 while applying numerous new health and safety protocols for those working on site.

The pandemic and any additional preventative or protective actions that governments or we may take in response to the COVID-19 pandemic may have a material adverse effect on our business or our suppliers, distribution channels, and customers, including business shutdowns or disruptions for an indefinite period of time, reduced operations, restrictions on shipping, fabricating or installing products, reduced consumer demand or customers’ ability to make payments. We have and may continue to experience additional operating costs due to increased challenges with our workforce (including as a result of illness, absenteeism or government orders), implementing further precautionary measures to protect the health of our workforce, increased project cancellations or projects put on hold, access to supplies, capital, and fundamental support services (such as shipping and transportation). During the first quarter of fiscal 2021 we had two projects on hold, one project cancelled, and three projects delayed by our customers due to the COVID-19 pandemic and related energy market dynamics. Any resulting financial impact from the pandemic cannot be fully estimated at this time, but may materially affect our business, financial condition or results of operations. The extent to which the COVID-19 pandemic affects our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain the pandemic or treat its impact, among others.

The impact of the COVID-19 pandemic may also exacerbate other risks discussed in Item 1A - Risk Factors of our Form 10-K for the fiscal year ended March 31, 2020, any of which could have a material adverse effect on us. The situation surrounding the COVID-19 pandemic and its impact continue to change rapidly and additional impacts that we are presently unaware of may arise.

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)

Large accelerated filer	☐		Accelerated filer	☒☐
Non-accelerated filer	☐☒	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐☒
Emerging growth company	☐

		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	1716

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2322

Item 4.	Controls and Procedures	2423

Part II.	OTHER INFORMATION

Item 1A.	Risk Factors	24

Item 6.	Exhibits	25

Signatures		26

	September 30, 2020			March 31, 2020			Change

Unbilled revenue (contract assets)	$	13,691		$	14,592		$	(901	)
Customer deposits (contract liabilities)		(24,838	)		(26,983	)		2,145
Net contract liabilities	$	(11,147	)	$	(12,391	)	$	1,244


(10)	Material Contracts

+	10.1	First Amendment to the Letter Agreement dated May 1, 2020 with respect to the continuing Letter of Credit Facility dated March 24, 2014, between the Company and HSBC Bank USA, National Association, effective as of August 23, 2020.

+	10.2	Pledge Agreement between the Company and HSBC Bank USA, National Association dated August 13, 2020.

#	10.3	Graham Corporation Annual Executive Cash Bonus Program in effect for the fiscal year ending March 31, 2021 is incorporated by reference from Exhibit 99.1 to the Company’s Current Report on Form 8-K dated August 11, 2020.

+#	10.4	2020 Graham Corporation Equity Incentive Plan

	Gross Carrying Amount		Accumulated Amortization		Impairment Loss		Net Carrying Amount
At December 31, 2017
Intangibles subject to amortization:
Customer relationships	$	2,700	$	1,267	$	—	$	1,433
Intangibles not subject to amortization:
Permits	$	10,300	$	—	$	8,600	$	1,700
Tradename		2,500		—		500		2,000
	$	12,800	$	—	$	9,100	$	3,700
At March 31, 2017
Intangibles subject to amortization:
Customer relationships	$	2,700	$	1,132	$	—	$	1,568
Intangibles not subject to amortization:
Permits	$	10,300	$	—	$	—	$	10,300
Tradename		2,500		—		—		2,500
	$	12,800	$	—	$	—	$	12,800


(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 Data File

+	101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

+	101.SCH	Inline XBRL Taxonomy Extension Schema Document

+	101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

+	101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

+	101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

+	101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

	104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
	+	Exhibit filed with this report

		# Management contract or compensation plan


			GRAHAM CORPORATION
By:			/s/ Jeffrey Glajch
			Jeffrey Glajch
			Vice President-Finance & Administration and
			Chief Financial Officer
			(On behalf of the Registrant and as Principal Financial Officer)