Investor Presentation

NYSE:GHM • March 2015

James R. Lines President & Chief Executive Officer Jeffrey F. Glajch Vice President & Chief Financial Officer

Safe Harbor Statement

© 2015 Graham Corp. - 2 -

This presentation contains 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.

Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “goal,” “outlook,” “priorities,” “could,” and other similar words. All statements addressing operating performance, events, or developments that Graham Corporation expects or anticipates will occur in the future, including but not limited to, statements relating to revenue, backlog and expected performance of Energy Steel & Supply Co., and expected expansion and growth opportunities within the domestic and international nuclear power generation markets, anticipated revenue, the timing of conversion of backlog to sales, profit margins, foreign sales operations, Graham Corporation’s strategy to build its global sales representative channel, the effectiveness of automation in expanding engineering capacity, the ability to improve cost competitiveness, customer preferences, changes in market conditions in the industries in which Graham Corporation operates, changes in general economic conditions and customer behavior and Graham Corporation’s acquisition and organic growth strategies are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Graham Corporation's most recent Annual Report filed with the Securities and Exchange Commission, included under the heading entitled “Risk Factors.”

Should one or more of these risks or uncertainties materialize, or should any of Graham Corporation's underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on Graham Corporation's forward-looking statements. Except as required by law, Graham Corporation disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this presentation.

© 2015 Graham Corp. - 3 -

Business & Strategic Overview

Graham Corporation – Market Data

Note: Market data as of March 9, 2015 [Source: Bloomberg]; ownership as of last filing date

United States 67%

Asia 7%

Middle East 5%

Other 21%

Q3 FY 2015 TTM Sales $123.8 million

© 2015 Graham Corp. - 4 -

Q3 FY 2015 TTM Orders $112.6 million

United States 53%

Asia 10%

Middle East 7% Other

30%

Founded: 1936 IPO: 1968 NYSE: GHM Market capitalization $239 million

Recent price $23.53

52-week range $36.24 – $20.58

Avg. daily trading volume (3 mos.) 59 thousand

Common shares outstanding: 10.1 million

Annualized dividend/dividend yield $0.32 / 1.4%

Ownership:

Institutional 77.5%

Insider 4.2%

Fiscal year end March 31

© 2015 Graham Corp. - 5 -

Short-term objective: Double business

Longer-term objective: Leverage competencies and financial strength to

diversify and provide further growth

• Leverage capacity to capture market share

• Expanding predictable base business

• Use of capital to diversify & strengthen revenue streams

• Key markets:

Refining

Petrochemical

Power

U.S. Navy

Executing Our Strategy to Expand Earnings

A Successful Track Record

© 2015 Graham Corp. - 6 -

• 10% revenue CAGR (FY2006 to Q3 FY2015 TTM) • 16% net income CAGR (FY2006 – Q3 FY2015 TTM) • EBITDA margins of mid 20% at last peak

Top-tier operating performance

• >90% of net income converted to cash (FY2006 to present) • Debt free balance sheet

Strong cash flow

• Organic growth • Acquisitions • Dividends, Share repurchases

Capital allocation focused on growth

Stronger earnings, less volatility

Refining 46%

Acquisitions present incremental growth potential

More Markets, More Customers

© 2015 Graham Corp. - 7 -

~ $100 million ~ $200 million

Power 5%

Other 22%

Refining 46%

Chemical/ Petrochemical 27% Chemical/

Petrochemical 20%-30%

Other 10%-15%

Navy 10%-15%

Refining 20%-30%

Power 17%

Navy/Other 17%

Chemical/ Petrochemical

36% Refining

30%

Prior Cycle Mix Projected Near-Term Mix Recent Mix

~ $100 million

Power 15%-25%

Addressing Key Markets Key

Markets Graham Share* Outlook Actions Share*

Goals

Global Refining >$150 million annually

~ 25% Opportunities more plentiful Sound long-term growth drivers

Assertive pricing strategy Take market share Further expand execution capacity

>40%

Global Chemical/ Petrochemical >$150 million annually

~15%

Strong domestic market Sound long-term growth drivers

Dominate U.S. market Take market share; retain price discipline Win in Asia Further expand execution capacity

>30%

U.S. Navy ~$50 million annually

~10% Submarine programs advancing Next carrier bid late CY 2015

Secure position in both submarine programs Win CVN80

40 to 50%

Power >$250 million annually

<10%

Nuclear MRO market rebounding Renewable power steady Four U.S. reactors under construction on-line 2018-2020 Pricing is steady

Strengthening management team Align sales, engineering and operations for growth

Double share

- 8 -

* Market share data are management estimates Secondary markets are not noted

© 2015 Graham Corp.

Increasing Predictable Base Business

• Short-term growth objective will be achieved through expansion of predictable base business: − Nuclear market MRO

− Executing Naval strategy

− Aftermarket strategy

− Short-cycle product strategies

• Expected to exceed $60 million in near-term, through organic growth strategies

© 2015 Graham Corp. - 9 -

$18 $21 $25

$29 $33

$25 $31

$42 $45 $45

$52 $60

Annual Predictable Base Business (Base revenue: $ in millions)

Reduce earnings volatility and achieve top-line growth

Diverse Bidding Pipeline

© 2015 Graham Corp. - 10 -

By Industry

Chemical/ Petrochemical

20%-25% Power

20%-25%

Other 10%-15%

Navy 5%-10%

Refining 35%-40%

As of December 31, 2014

$800 Million to $1 Billion • $800 million to $1 billion TTM

bidding pipeline – Pipeline includes bids to

multiple EPCs or OEMs for one opportunity

– Pipeline is double compared with 2004, indicative of higher level of activity in this stage of the cycle

– Recent drop in oil prices has not impacted near-term bid activity Long-term fundamentals

remain intact

Created Capability to Drive Higher Sales

• Facilities enlarged • Execution capacity

expanded • Subcontracting certain

production

Operations Process

• Built stronger opportunity pipeline

• Management process sharpened

Sales Process

• Attracting and hiring talent • Performance management • Employee engagement

People Process

Improving Market

Fundamentals

Strong, Sustained Growth • Take market share • Capture new customers • Grow and diversify revenue • Expand profit

© 2015 Graham Corp. - 11 -

Year 1 Year 2 Year 3 Year 4 Year 5

Value Enhancing Sales Cycle

Year 1 Year 2

Graham Competitive Advantage: Early Involvement

Graham establishes competitive advantage during first 24 months… Understanding pipeline, developing design options, identifying

decision makers, understanding timing, creating strong relationships to… Gain advantage, optimize margin and win business

Concept FEED* EPC Bid Purchase Construction

* Front End Engineering Design Cradle to grave support

- 12 - © 2015 Graham Corp.

Financial Overview

© 2015 Graham Corp. - 13 -

Batavia Expansion (~60% in FY14 and FY15)

$3.2 $1.7

FY12 FY13 FY14 FY15E

Capital Expenditures $5.8

(1)

$5.3 10.7% 11.7%

10.0% 12.2%

FY12 FY13 FY14 Q3 FY15 TTM

Working Capital Utilization(2)

$41.7 $51.7

$61.1 $62.5

3/31/12 3/31/13 3/31/14 12/31/2014

Strong Balance Sheet

© 2015 Graham Corp. - 14 -

Cash, Cash Equivalents and Investments

($ in millions)

(1) Guidance confirmed on January 30, 2015 (FY15E mid-point between $5.5 million - $6.0 million) (2) Defined as current assets (excluding cash and cash equivalents and investments) less current liabilities divided by annual revenue

$2.6

$12.4 $15.2

$8.2

FY12 FY13 FY14 Q3 FY15 TTM

Operating Cash Flow

Strong Financial Results

© 2015 Graham Corp. - 15 -

(Revenue in millions)

(1) Guidance confirmed as of January 30, 2015 (FY15E mid-point). (2) FY2007, FY2010, FY2011, FY2012, and FY2013 EPS have been adjusted to exclude unusual items. Please see supplemental slides for a reconciliation of

adjusted EPS to GAAP EPS. (3) See supplemental slide for EBITDA reconciliation and other important disclaimers regarding Graham’s use of EBITDA

(1)

$55.2 $65.8

$86.4 $101.1

$62.2 $74.2

$103.2 $105.0 $102.2

$127.5

29% 26%

40% 41% 36%

29% 32% 30% 31% 31%

11% 11%

25% 27% 18% 15% 19% 17% 17% 18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15E

Annual Trends

Revenue Gross Margin EBITDA Margin

EPS $0.45(2) $1.49 $0.38 $1.71 $0.69(2) $0.64(2) $1.01(2) $1.10(2) $1.00

(3)

Solid Cash Generation

• March 2004 Cash and Investments, net $ 3.8 • FY 2005 thru Q3 FY 2015 cumulative cash flow items:

– Net income $ 95.1 – Depreciation and amortization 15.2 – Working capital change (6.2) 104.1

– Capital investments (23.5) – Dividends (8.2) – Financing/Other 4.8

• Subtotal 81.0 • Energy Steel acquisition (18.5) • December 2014 Cash and Investments, net $ 62.5

© 2015 Graham Corp. - 16 -

($ in millions)

Navy 21%

Power 11%

Other 8%

Chemical/ Petrochemical

23% Refining

37%

($ in millions)

Backlog by Industry December 31, 2014

Projected Backlog Conversion

12-24 Months 20-25% Beyond 24

Months 5-10% Within 12

months 70-75%

Months 12-24 15-20%

Diverse and Strong Backlog Level

- 17 - © 2015 Graham Corp.

$33.1

$54.2

$75.7

$48.3

$94.3 $91.1 $94.9 $85.8

$112.1 $103.8

3/31/06 3/31/07 3/31/08 3/31/09 3/31/10 3/31/11 3/31/12 3/31/13 3/31/14 12/31/14

Backlog

December 31, 2014 • Backlog declined due to refining market uncertainties

• Strong backlog mix with high percentage of refining projects

• Approximately 1/3 of backlog is from non-cyclical Nuclear and U.S. Navy strategies

– Supporting continued growth of predictable base business

Acquisition Strategy

© 2015 Graham Corp. - 18 -

Engineered-to-order products for energy industry

Strong management team with customer and quality focus

$20 million – $60 million in annual revenue

Cash return exceeds equity cost of capital

Will pay fair price, but will not overpay

Diversify products, markets, and/or geographic presence

Returning Value to Shareholders

© 2015 Graham Corp. - 19 -

• Recent dividend increases – 100% increase on January 29, 2015 – 33% increase on February 25, 2014 – 50% increase on February 11, 2013

• $18 million stock repurchase program approved January 29, 2015

• Institutional ownership – 9/30/14: 76% – 9/30/09: 54% – 9/30/06: 42%

(1) as a percent of revenue

Near-Term Expansion Targets

© 2015 Graham Corp. - 20 -

Revenue(1)

Gross Margin(1)

EBITDA Margin(1)

$102 million

31%

17%

>$200 million

Mid to Upper 30% Range

Low to Mid 20% Range

Operating leverage and pricing drive EBITDA margin expansion

(1) Base year fiscal 2014 is shown; margins are as a percentage of revenue

Strong Revenue Expectations and Visibility on Shipment Timing

• Revenue Upper half of $125 million - $130 million

• Gross margin 30% - 31%

• SG&A 14% - 14.5% of sales

• Effective tax rate 32% - 33%

© 2015 Graham Corp. - 21 -

(1) FY2015 Guidance confirmed as of January 30, 2015

Fiscal 2015 Guidance:(1)

Near Term Target: Exceed $200 million in organic revenue

Expected long-term global energy demand growth drives opportunities

Leading market position and worldwide brand recognition

Sales model based on early engineering involvement

Expanding addressable market opportunities

Strong and flexible balance sheet

Acquisition opportunities

Results-oriented management team

Top quartile financial performance

Solid operating leverage and powerful cash generation

© 2015 Graham Corp.

Investment Highlights

- 22 -

Supplemental Information

© 2015 Graham Corp. - 23 -

Executive Compensation

• Base Salary – Reviewed annually by our compensation committee and determined based on

company performance, individual performance, job responsibilities, and internal pay equity

– Provides compensation that is not “at-risk” to compensate executive officers

• Annual Incentive Cash Compensation – Based on achievement of threshold, target and maximum levels of net income

and order level targets as well as personal goals

• Long Term Equity Incentive Compensation – Performance-Vested Restricted Stock

• Revenue level 3 years out • Relative profitability measure [EBITDA vs. BICC (Baird Industrial Index)]

• Time-Vested Restricted Stock – Designed to retain executives and align their interests with those of our

shareholders

Shareholder Alignment

© 2015 Graham Corp. - 24 -

Professional Development &

Improved Training

Redefined Traditional Roles

& Addressed Organizational

Constraint

Increased Decision Rights

Added New Skills to our Bench

Performance Management &

Increased Accountability

• Empowerment

• Direct labor as value creator vs. cost

• Unlocked potential of human capital

© 2015 Graham Corp. - 25 -

PEOPLE

Culture Transformation: Power of Engagement Human capital is our most critical asset

Investments in Capacity for Organic Growth

© 2015 Graham Corp. - 26 -

• Invested $15 million in facilities and equipment in last 5 years

• Added 40,000 ft2 of additional manufacturing space • New machines and technology

Expanded/Upgraded Facilities

• Established dedicated facility for U.S. Navy • Flexibility to address other demand

Supports Diversification

Strategy

• Increased workforce by 40% 31 welders, 7 machinists, 20 engineers

• IT processes • Human resource processes • Brand: Employer of Choice

People Investments

Global Oil Refining Industry

• Total expected market demand ~$150 million to ~$200 million annually

– Market share: high 20s to low 30s

• Tactics for growth – Going after more projects

– Build the capacity to execute the opportunities

• Market demand drivers – New capacity – Revamp/upgrades, debottlenecking, feedstock

changes – Statutory regulations; ULSD, clean gasoline, etc. – Replacement equipment

Leading Supplier of Vacuum Systems and Surface Condensers

Refining 30%

Chemical/ Petrochem

36% Power 17%

Navy/ Other 17%

Percents based on Q3 FY2015 TTM sales of

$123.8 million

Key Metric: 1mmbbl/day of new capacity $45mm to $60mm of opportunity

© 2015 Graham Corp. - 27 -

Refining 30%

Chemical/ Petrochem

36%

Power 17%

Chemical/Petrochemical Industry Expansion Natural Gas Growth Trend

• Total expected market demand ~$150 million annually

– Market share: low to mid teens

• Tactics for growth – Capitalize on customer relationships and strong

brand – Early engagement on projects – Expand foothold in Asia

• Market demand drivers – New capacity – Revamp and debottleneck – Replacement equipment – Monetization of domestic natural gas resources

Key Metric: 1mmTPY of new capacity $5mm to $8mm of opportunity

Navy/ Other 17%

Percents based on Q3 FY2015 TTM sales of

$123.8 million

© 2015 Graham Corp. - 28 -

Power Industry Expansion

• Tactics for growth – Strong pipeline for replacing and upgrading

equipment at existing power facilities • Expanding addressable opportunities for

replacement via Energy Steel & Graham synergies

• Capture opportunities at new build/restarts • Access China and India markets • Market demand drivers

– MRO – New capacity

• Nuclear • Renewable • Cogeneration

• Rerate, power augmentations

Refining 30%

Chemical/ Petrochem

36%

Power 17%

Key Metric: 1,000mw new nuclear capacity $30mm to $40mm opportunity

Navy/ Other 17%

Percents based on Q3 FY2015 TTM sales of

$123.8 million

© 2015 Graham Corp. - 29 -

Deepen Reach into Nuclear Power Industry with Value-Add Equipment and Materials

• Aircraft carrier program ~$35 million to ~$40 million per carrier; bid CVN 80 in 2016

• Submarine program – ~$15 million to ~$20 million per Virginia Class;

45 subs, building one to two subs per year – ~$20 million to ~$25 million per Ohio

Replacement Class; 11 to 13 subs planned with construction scheduled to begin in 2021

• Tactics for growth – Certifications – Capital investments – Foot in the door

• Market demand drivers – Build out of Virginia Class sub program – Ohio Replacement Class sub program – Carrier fleet – Replacement equipment

Refining 30%

Chemical/ Petrochem

36%

Power 17%

Navy/ Other 17%

Percents based on Q3 FY2015 TTM sales of

$123.8 million

Naval Nuclear Propulsion Program Become Lead Supplier of Surface Condensers and Ejectors for U.S. Navy

- 30 - © 2015 Graham Corp.

EBITDA Reconciliation – Annual

Adjusted EBITDA is defined as consolidated net income before acquisition costs, interest, taxes, depreciation and amortization Graham believes that when used in conjunction with GAAP measures, adjusted EBITDA, which is a non-GAAP measure, assists in the understanding of Graham’s operating performance

($ in thousands)

- 31 - © 2015 Graham Corp.

(1) 2015E GAAP operating profit based on the midpoint of FY 2015 guidance: revenue $128.8 million, gross margin 30.5% and SG&A 14.25% of sales; guidance updated as of January 30, 2015

Fiscal Years Ended March 31 2015E(1) 2014 2013 2012 2011 GAAP operating profit $ 20,900 $ 14,617 $ 15,262 $ 17,095 $ 8,775

Acquisition costs - - - - 676

Depreciation & amortization 2,400 2,199 2,079 2,024 1,648

Adjusted EBITDA $ 23,300 $ 16,816 $ 17,341 $ 19,119 $ 11,099

Adjusted EBITDA Margin 18% 17% 17% 19% 15%

2010 2009 2008 2007 2006

GAAP operating profit $ 10,042 $ 26,328 $ 21,088 $ 6,013 $ 5,454

Acquisition costs - - - - -

Depreciation & amortization 1,119 1,005 885 887 793

Adjusted EBITDA $ 11,161 $ 27,333 $ 21,973 $ 6,900 $ 6,247

Adjusted EBITDA Margin 18% 27% 25% 11% 11%

Adjusted EPS Reconciliation (in millions, except per share data)

- 32 - © 2015 Graham Corp.

FY 2007 FY 2010 FY 2011 FY 2012 FY 2013

GAAP diluted earnings per share $ 0.58 $ 0.64 $ 0.59 $ 1.06 $ 1.11 Acquisition costs after tax, per diluted share - - $ 0.05 - - Adjustment of historical R&D tax credits after tax, per diluted share $ (0.13) $ 0.05 - $ 0.04 - Reversal of Energy Steel earn-out after tax, per diluted share - - - - $ (0.10)

Adjusted diluted earnings per share $ 0.45 $ 0.69 $ 0.64 $ 1.10 $ 1.01

North American Competition

Market Competitors Refining vacuum distillation Gardner Denver

Chemicals/Petrochemicals Croll Reynolds; Schutte Koerting; Gardner Denver

Turbomachinery OEM – refining, petrochemical

Ambassador; SPX (Yuba); KEMCO; Donghwa-Entec; Oeltechnik

Turbomachinery OEM – power and power producer

Holtec; Babcock Thermal Engineering; SPX (Yuba); KEMCO; Maarky Thermal Systems

HVAC Alfa Laval; APV; Xylem; Ambassador

Naval Nuclear Propulsion Program Joseph Oats; DCFAB

Nuclear Dubose; Consolidated; Tioga; Nova; Joseph Oats; Energy & Process

Defense DC Fabricators, Triumph Aerospace, Xylem, PCC

- 33 - © 2015 Graham Corp.

Market Competitors Refining vacuum distillation GEA Wiegand; Korting Hannover;

Edwards, Gardner Denver

Chemicals/Petrochemicals Croll Reynolds; Schutte Koerting; GEA Wiegand; Korting Hannover; Edwards, Gardner Denver

Turbomachinery OEM – refining, petrochemical

Donghwa-Entec; Bumwoo; Oeltechnik; Mazda (India); Hangzhou Turbine Equipment; Chem Process Systems; KEMCO

Turbomachinery OEM – power and power producer

Holtec; Babcock Thermal Engineering; SPX (Yuba); Mazda (India); KEMCO; Chem Process Systems

International Competition

- 34 - © 2015 Graham Corp.

Supports a steam turbine and enables the conversion of maximum energy in high pressure steam into power.

Products: Surface Condenser

© 2015 Graham Corp. - 35 -

Vital Processing Components

An ejector system lowers the pressure in the distillation column to allow crude oil to boil at a lower temperature. This allows for more efficient and cost-effective separation of crude oil into valuable products, such as diesel, gas oils, kerosene, and other fuels.

A condenser supports a steam turbine and enables the conversion of maximum energy in high pressure steam into power.

REFINERY EJECTOR SYSTEM CNOOC HUIZHOU REFINERY–CHINA 240,000 BBL/DAY REFINERY