Graham Corporation (GHM:ASE) announced today results for the third quarter (October - December 2002) of its current fiscal year.

Net sales for the three months ended December 31, 2002 of $13,703,000 produced a net loss of $178,000, or diluted loss per share of $.11. Net sales for the quarter compare to sales for the third quarter of the previous fiscal year of $11,810,000, which produced net income of $354,000, or diluted earnings per share of $.21.

Net sales for the nine months ended December 31, 2002 of $35,308,000 produced a net loss of $987,000, or diluted loss per share of $.59. Net sales for the first nine months compare to sales for the nine months ended December 31, 2001 of $35,473,000, which produced net income of $94,000, or diluted earnings per share of $.06.

New orders for the third quarter were $8,790,000 compared to $9,074,000 in new orders for the same quarter in the previous fiscal year.

Consolidated backlog at December 31, 2002 was $27,003,000 compared to a backlog at March 31, 2002 of $33,871,000.

The Company also announced that it has begun a major restructuring to accommodate business conditions that continue to be depressed. Last week the Company reduced its office staff and plant administrative staff by approximately 17% and is undertaking significant changes in its employee benefits cost structure.

Al Cadena, Graham's President and CEO, commented, "The structural changes we have undertaken are to put the Company in a position to meet the current competitive situation while leaving it poised to take advantage when conditions improve. In particular, Graham is continuing to carry out its strategies in the areas where it can achieve the greatest growth in market share. The current restructuring leaves this capacity intact, notwithstanding the significant cost reductions it achieves."

Graham designs and builds vacuum and heat transfer equipment for process industries throughout the world. It is a worldwide leader in vacuum technology. The principal markets for Graham's equipment are the chemical, petrochemical, petroleum refining and electric power generating industries, including cogeneration and geothermal plants. Other markets served include metal refining, pulp and paper, shipbuilding, water heating, refrigeration, desalination, food processing, drugs, heating, ventilating and air conditioning. Graham's ejectors, liquid ring and dry vacuum pumps, condensers, heat exchangers and other products, sold either as components or as complete systems, are used by its customers to produce synthetic fibers, chemicals, petroleum products (including gasoline), electric power, processed food (including canned, frozen and dairy products), pharmaceutical products, paper, steel, fertilizers and numerous other products used everyday by people throughout the world.