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Jefferies Global Industrials Conference

James R. Lines President & Chief Executive Officer

Jeffrey F. Glajch Vice President & Chief Financial Officer

NYSE:GHM • August 11, 2015

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Safe Harbor Statement 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.

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Business & Strategic Overview

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Financial Goals

Organic Revenue Growth

Profitability

Capital Stewardship

Double Revenue Across a Cycle

>17% Average EBITDA Margin*

>12% Average ROIC*

FY14 to FY15 32% Growth

FY15 EBITDA Margin 18.9%

FY15 ROIC 13.3%

Goals Performance Measures Recent Results

* Average Cycle performance

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• Leverage assets 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 Short-term objective:

Drive top-line growth through greater market share

Near-term objective: $200 million revenue

Long-term objective: Leverage competencies and

financial strength to diversify and provide further growth

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(1) as a percent of revenue

Near-Term Expansion Targets

Revenue(1)

Gross Margin(1)

Adjusted EBITDA Margin(1)

$135 million

31%

19%

>$200 million

Mid to Upper 30% Range

Low to Mid 20% Range

Operating leverage and pricing drive EBITDA margin expansion

(1) Base year fiscal 2015 is shown; margins are as a percentage of revenue

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Stronger earnings, less volatility

Refining 46%

Acquisitions present incremental growth potential

Diversification Strategy

~ $200 million

Refining 46%

Chemical/ Petrochemical

20%-30%

Other 10%-15%

Navy 10%-15%

Refining 20%-30%

Power 15%

Navy

Other Chemical/

Petrochemical 35%

Refining 32%

Projected Near-Term Mix

Power 15%-25%

18%

~ $100 million

Power 5%

Other 22%

Refining 46%

Chemical/ Petrochemical 27%

Prior Cycle Mix Recent Mix

~ $135 million

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Targeted Path to $200 Million Revenue

($ in millions)

50

70

90

110

130

150

170

190

210

FY 2015 Sales Refining Chemical /Petrochemical

Other Power Navy Near-Term SalesGoal

CORE GRAHAM

DIVERSIFICATION STRATEGY

$135

$200

$10 – $15 $5 – $10

$5 – $10

$15 – $20

$10 – $20

Diversification Strategy Drives Growth

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Strengthening Stable Revenue Base

• Expect to exceed $60 million in near-term, through organic growth strategies to capture greater market share: − Nuclear market MRO

− Executing Naval strategy

− Aftermarket strategy

− Short-cycle product strategies

• Stronger predictable base of sales reduces earnings volatility

Reducing Volatility

$21 $25

$29 $33

$25

$31

$42 $45 $45

> $60

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

$51

$18

10

Other 4%

Power 12%

Navy 48%

Chem/ Petrochem

12%

Refining 24%

($ in millions) Backlog by Industry June 30, 2015

Projected Backlog Conversion

Backlog Remains Strong

• Strong backlog mix with high percentage of U.S. Navy projects

• 55% from markets or customers not served by the Company five years ago

– Reducing the impact of more cyclical sales in the energy industry

$54.2

$75.7

$48.3

$94.3 $91.1 $94.9 $85.8

$112.1 $113.8 $110.1

3/31/07 3/31/08 3/31/09 3/31/10 3/31/11 3/31/12 3/31/13 3/31/14 3/31/15 6/30/15

Backlog

June 30, 2015

Within 12 months

45-50%

Beyond 24 Months 40-45% 12-24

Months 5-10%

Reflects benefits of diversification strategy

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Diverse Bidding Pipeline

By Industry

Chemical/ Petrochemical

20%-25%

Power 15%-20%

Other 5%-10%

Navy 2%-5%

Refining 40%-45%

As of June 30, 2015

$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 indicative of diversification strategy & opportunity

– Recent drop in oil prices has impacted recent bid activity Long-term fundamentals

remain intact

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Process-Critical Equipment

High Cost of Failure

Low Fault Tolerance Performance Specifications

Difficult or Impossible to Replace

Low Relative Cost

Customers require quality, complex engineered-to-order equipment

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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

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Financial Overview

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Batavia Expansion (~65% in FY14 and FY15)

$1.7

FY13 FY14 FY15 FY16E

Capital Expenditures

$5.3 $5.3

11.7% 10.0%

15.6%

FY13 FY14 FY15

Working Capital Utilization(2)

$51.7 $61.1 $60.3 $62.6

3/31/13 3/31/14 3/31/15 6/30/2015

Strong Balance Sheet Cash, Cash Equivalents

and Investments

($ in millions)

(1) Guidance confirmed on July 30, 2015 (FY16E capex between $2.0 million - $2.5 million) (2) Defined as current assets (excluding cash and cash equivalents and investments) less current liabilities divided by annual revenue

$12.4 $15.2

$6.3

FY13 FY14 FY15

Operating Cash Flow

$2.0 - $2.5(1)

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Strong Financial Results (Revenue in millions)

(1) See supplemental slide for Adjusted EBITDA reconciliation and other important disclaimers regarding Graham’s use of Adjusted EBITDA (2) Source: Bloomberg (3) FY2011, FY2012, FY2013 and FY2015 EPS have been adjusted to exclude unusual items. Please see supplemental slides for a reconciliation of GAAP EPS to

Adjusted EPS.

$74.2

$103.2 $105.0 $102.2

$135.2

15%

19% 17% 17%

19%

9% 9% 8% 8% 8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

$0

$20

$40

$60

$80

$100

$120

$140

$160

FY11 FY12 FY13 FY14 FY15

Revenue GHM Adj. EBITDA Margin US Industrials Median Adj. EBITDA Margin

EPS

(1)

$0.64(3) $1.01(3) $1.10(3) $1.00 $1.57(3)

(2)

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Strong Cash Generation ($ in millions)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

March 2005Cash &

Investments,net

Net Income Depreciationand

amortization

Working capitalchange

Capitalinvestments

Financing/Other Dividends Energy Steelacquisition

March 2015Cash &

Investments,net

0.8

100.4

15.0 (9.7) (23.6)

4.4 (8.7) (18.5)

60.1

Uses of Cash Sources of Cash

March 2005 to March 2015

Approximately 90% of Net Income converted to

cash or returned to shareholders

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Graham Capital Allocation Priorities

Dividend Payment

Organic Growth

Stock Repurchase

Acquisition Strategy

Maintain a strong, prudently managed balance sheet

• Invest in current operations to drive organic growth

• Continue consistent dividend payments and increases

• Seek opportunistic acquisitions with cash return that exceeds equity cost of capital

• Return value to shareholders through stock repurchases

Cash from Operations

Cash from Balance Sheet

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Shareholder Focus

• Sustainable dividends reflect stability of operating cash flows across business cycle

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

36% 63% 77%

3/31/2007 3/31/2010 3/31/2015

Institutional Ownership

$0.08 $0.12

$0.16

$0.32

Prior 2/11/2013* 2/25/2014* 1/29/2015*

Annualized Dividends Per Share

* Reflects date of dividend increase

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Acquisition Strategy

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

Strong pricing discipline

Diversify products, markets, and/or geographic presence

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Uncertain Near-Term Market Impacts FY2016 Revenue Expectations

• Revenue $95 million – $105 million

• Gross margin 26% – 28%

• SG&A 17% – 18% of sales

• Effective tax rate 32% – 33%

(1) FY2016 Guidance provided as of July 30, 2015

Fiscal 2016 Guidance:(1)

Strategic Target: Exceed $200 million in organic revenue

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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

Investment Highlights

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Jefferies Global Industrials Conference NYSE:GHM • August 11, 2015

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Supplemental Information

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Graham Corporation – Market Data

Note: Market data as of August 3, 2015 [Source: Bloomberg]; ownership as of last filing date

United States 64%

Asia 8%

Middle East 8%

Other 20%

FY 2015 Sales $135.2 million

FY 2015 Orders $136.5 million

United States 67%

Asia 6%

Middle East 5%

Other 22%

Founded: 1936 IPO: 1968 NYSE: GHM Market capitalization $192 million

Recent price $19.26

52-week range $34.65 – $17.11

Avg. daily trading volume (3 mos.) 46,000

Common shares outstanding: 10.1 million

Annualized dividend/dividend yield $0.32 / 1.8%

Ownership:

Institutional 77.4%

Insider 4.2%

Fiscal year end March 31

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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

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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

PEOPLE

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

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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 32%

Chemical/ Petrochem

35%

Power 15%

Navy/ Other 18%

Percents based on FY 2015 sales of

$135.2 million

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

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Refining 32%

Chemical/ Petrochem

35%

Power 15%

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 18%

Percents based on FY 2015 sales of

$135.2 million

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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 32%

Chemical/ Petrochem

35%

Power 15%

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

Navy/ Other 18%

Percents based on FY 2015 sales of

$135.2 million

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

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• 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 32%

Chemical/ Petrochem

35%

Power 15%

Navy/ Other 18%

Percents based on FY 2015 sales of

$135.2 million

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

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Investments in Capacity for Organic Growth

• 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

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Adjusted EBITDA Reconciliation – Annual

Adjusted EBITDA is defined as consolidated net income before acquisition related expenses, non-recurring restructuring charges, interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP. Nevertheless, Graham believes that providing non-GAAP information such as Adjusted EBITDA is important for investors and other readers of Graham's financial statements, as it is used as an analytical indicator by Graham's management to better understand operating performance. Graham’s credit facility also contains ratios based on EBITDA. Because Adjusted EBITDA is a non-GAAP measure and is thus susceptible to varying calculations, Adjusted EBITDA, as presented, may not be directly comparable to other similarly titled measures used by other companies.

(in thousands)

Fiscal Years Ended March 31 2011 2012 2013 2014 2015

GAAP operating profit 8,775$ 17,095$ 15,262$ 14,617$ 21,574$

Restructuring charge - - - - 1,718

Acquisition costs 676 - - - -

Depreciation & amortization 1,648 2,024 2,079 2,199 2,308

Adjusted EBITDA 11,099$ 19,119$ 17,341$ 16,816$ 25,600$

Adjusted EBITDA margin 15% 19% 17% 17% 19%

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EBITDA Reconciliation – Quarterly

EBITDA is defined as consolidated net income before interest expense and income, income taxes, and depreciation and amortization. EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP. Nevertheless, Graham believes that providing non-GAAP information such as EBITDA is important for investors and other readers of Graham's financial statements, as it is used as an analytical indicator by Graham's management to better understand operating performance. Graham’s credit facility also contains ratios based on EBITDA. Because EBITDA is a non-GAAP measure and is thus susceptible to varying calculations, EBITDA, as presented, may not be directly comparable to other similarly titled measures used by other companies.

2014 2015Net income 2,392$ 2,361$

+Net interest income (43) (49)

+Income taxes 1,234 1,087

+Depreciation & amortization 574 621

EBITDA 4,157$ 4,020$

EBITDA margin % 14.6% 14.6%

June 30,Three Months Ended

(in thousands)

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

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

GAAP diluted earnings per share $ 0.59 $ 1.06 $ 1.11 $ 1.00 $ 1.45

Acquisition costs after tax, per diluted share 0.05 - - - -

Adjustment of historical R&D tax credits after tax, per diluted share - 0.04 - - -

Restructuring charge after tax, per diluted share - - - - 0.12

Reversal of Energy Steel earn-out after tax, per diluted share - - (0.10) - -

Adjusted diluted earnings per share $ 0.64 $ 1.10 $ 1.01 $ 1.00 $ 1.57

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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

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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

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

Products: Surface Condenser

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

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