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Plug Power awarded $76M from DOE, still awaiting word on loan, reports record revenue but still no profits

By Howard B. Owens
plug power WNY STAMP
File photo of Plug Power facility under construction at WNY STAMP.
By Howard Owens.

The Department of Energy has awarded grants totaling $75.7 million to Plug Power, the Latham-based green hydrogen power company currently constructing a production facility in WNY STAMP in the town of Alabama.

The funds are part of a $1 trillion infrastructure bill approved by Congress and President Joe Biden in 2021 and are intended to help with research and development of hydrogen fuel production.

The company has also applied for a $1.6 billion low-interest loan from the DOE. That loan is apparently still under consideration.

Plug Power is betting that hydrogen power will become a big winner in the race to develop clean, renewable energy to sustain the economy and protect the environment in the coming decades. The Latham-based company specializes in "green hydrogen," which is the generation of hydrogen fuel using renewable energy sources such as solar and hydropower. An apparent attraction of WNY STAMP is the ability at that location to tap into hydropower generated by Niagara Falls.

Plug Power aims to provide customers with fuel cells, electrolyzers (splitting water into hydrogen and oxygen), to liquid hydrogen fuel. Plug Power wants to provide distribution, delivery, and services and foresees a future for hydrogen that includes uses such as long-haul trucking.

Plug Power's executives have set ambitious goals -- producing 2,000 tons of hydrogen daily by 2030. At that rate, the company hopes to generate $20 billion in annual revenue at that point with a profit margin of at least 30 percent.  

“The Bipartisan Infrastructure & Jobs Law is helping supercharge Upstate NY’s clean hydrogen sector. With this federal funding, Plug Power and other cutting-edge companies will be able to increase production capacity and spark new innovation to reach the next frontier of clean hydrogen manufacturing and research, all while supporting good-paying clean energy jobs and boosting the fight against climate change,” said, Sen. Charles Schumer. “Clean green hydrogen is one of the most exciting forms of new energy production, and with the major federal investments being made thanks to the Bipartisan Infrastructure Law and Inflation Reduction Act I championed, Upstate NY is poised to lead the way in powering America’s clean energy future.”

The grants are divided into two components.

The company will receive $45.7 million for the following project description:

The goal of this project is to establish and implement automation capabilities within our high-performance PEM stack manufacturing facility in Rochester, New York capable of producing 5,000 1 MW stacks per year.

This project will scale up manufacturing of proton exchange membrane electrolyzer stacks to the multi-GW scale, driving down costs to meet DOE targets. This project will automate membrane electrode assembly fabrication and stack assembly and enable automated inspection with machine learning to accelerate factory acceptance testing.

The project description for the second grant, $30 million:

This project will demonstrate a production pathway to meet a projected 2030 system cost of $80/kW for 100,000 heavy-duty fuel cell systems per year and automate the manufacturing of high-performance, low-defect membrane electrode assemblies in collaboration with the National Renewable Energy Lab.

The project will demonstrate an innovative expansion of their current manufacturing line.

“We are very appreciative and excited about the DOE's clean energy manufacturing initiatives and their profound impact on propelling Plug's industry-leading manufacturing capabilities in fuel cell and electrolyzer MEAs (Membrane Electrode Assemblies) and stacks," said Andy Marsh, CEO of Plug. “Congress enacted these policies to advance hydrogen and fuel cells as vital components of the United States’ climate strategy.  This funding will advance Plug’s fuel cell and electrolyzer manufacturing capabilities, create good paying jobs in New York, and fortify the region’s leadership in the national clean energy transition.”

The company selected WNY STAMP for the construction of a liquid hydrogen plant in February 2021.  The plant will cost more than $290 million to complete. 

Plug Power expects to generate 74 tons per day of liquid hydrogen at its WNY STAMP plant. The company recently opened two new production facilities in Georgia and Tennessee, and the WNY STAMP plant is expected to open in early 2025.

Empire State Development is scheduled to pay up to $2 million in Excelsior Tax Credits in exchange for the creation of 68 jobs at the plant, or about $2,941 per job per year over 10 years. Plug Power is not eligible to receive the tax credits until the jobs are filled. The average starting salary is expected to be approximately $70,000 plus benefits.

As part of the project, Plug Power agreed to invest $55 million in a 450-megawatt electrical substation that will make electricity available to other WNY STAMP tenants.

The company received $118.2 million in sales and property tax exemptions from the Genesee County Economic Development Center. Over the 20-year life of the property tax extensions, Plug Power will make payments in lieu of taxes totaling $2.3 million annually, which will be shared by Genesee County, the Town of Alabama, and the Oakfield-Alabama School District.  Each jurisdiction will also receive an increasing amount of property tax payments each year over the life of the agreement.

In accordance with Security and Exchange Commission Rules, Plug Power disclosed in November that a shortage of cash threatened its ability to remain a "going concern" within the following 12 months.  It suggested it could raise more cash by selling stock and that the company expected to receive a sizable loan from the Department of Energy.

Since then, Plug Power authorized B. Riley Securities to offer additional public shares of the company for sale at market rate with the goal of raising an additional $1 billion in capital.  That agreement was announced in January.  Since then, it has reportedly sold 77,417,069 new shares of stock, raising more than $300 million in cash. The company is continuing to sell new shares with a goal of selling another $700 million in 2024.

On Monday morning, the company announced its fourth quarter 2023 results and that it has removed its "going concern" guidance, stating, "The Company has determined it has sufficient cash on hand coupled with available liquidity to fund its ongoing operations for the foreseeable future."

It also announced record revenue of $891 million for the year, a 27% increase over the prior year.

However, the company continues to lose money and has never turned a profit, which, 25 years into its existence, continues to spook investors. After the Q4 report was released on Monday, the price per share of the company's stock dropped 17 cents and closed at $3.37. It hasn't traded above $5 since November. In early 2021, it was trading for more than $60 a share.

For previous Plug Power coverage, click here.

GCEDC board to consider assistance for HP Hood 32,500 square foot expansion

By Press Release
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H.P. Hood plant in the Genesee Valley Agri-Business Park, Batavia.
FIle photo by Howard Owens.

Press release:

The Genesee County Economic Development Center (GCEDC) Board of Directors will consider a final resolution for HP Hood’s $120 million proposed expansion project at its meeting on Thursday, March 7.

Announced by New York State Governor Kathy Hochul last fall, HP Hood plans to expand its footprint at the Genesee Valley Agri-Business Park. The project includes the construction of a 32,500 square foot expansion to accommodate its automatic storage and retrieval system (ASRS) refrigerated warehouse.  The project will also include new batching and processing systems and other upgrades, allowing the company to increase capacity and begin a new production line. 

“The agricultural sector is a backbone of our regional and state economy, as evidenced by the significant investment and jobs provided by companies such as HP Hood, Upstate Niagara Cooperative, and O-AT-KA Milk Products, among many others,” said GCEDC President and CEO Steve Hyde. The sector's growth here is the result of the Genesee Agri-Business Park, which was constructed in 2011 and is now almost at full build-out.”

The expansion would create 48 new jobs while retaining 455 full-time positions as part of the company’s 1,200 employees throughout New York State. Investments at the Genesee Valley Agri-Business Park have resulted in a cluster with over 1.2 million sq. ft. of food and beverage facilities employing over 1,000 professionals in the food processing industry, the leading employment sector in Genesee County and GLOW region.

Batavia Downs records busiest week

By Press Release
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Submitted photo of Joe Pantoliano – Actor (Sopranos, Matrix).

Press Release:

Batavia Downs Gaming and Hotel had a record-setting week From February 18 to 24.  With daily promotions, nicer weather, and the heavily anticipated Legends & Stars Sports Card Expo taking place in the week, more than $25 million in Credits Played went through the machines at the gaming facility, marking its highest week-long total of all time.

On Friday, Feb. 23, Batavia Downs reported its third-best, single-day record in credits played, with $5,173,626.

The week total for net win of $1,871,544 was the second-highest in Batavia Downs's history. 

“We are so very appreciative that, in a region with so many entertainment options, people are choosing to visit Batavia Downs in record numbers," said Henry Wojtaszek, Batavia Downs President and CEO.  “To commemorate the record-breaking weekend and to say "thank you" to our guests, I’ve asked our Marketing Team to do a special promotional drawing on Sunday.“

A special drawing, set for 8:30 p.m. on Sunday, March 3, will see one person win $2,000 in cash and a pair of suite-level tickets to the Zach Bryan March 10 concert at KeyBank Center.

Anyone who plays on March 3, using their Player's Card, is eligible for the contest.

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Submitted photo of Lawrence Taylor - Giants Legend.
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Submitted photo of Kevin Nash - Wrestler.

Graham Corporation to present at the Gabelli Pump, Valve & Water Systems Symposium

By Press Release

Press Release:

Graham Corporation (NYSE: GHM) (“GHM” or “the Company”), a global leader in the design and manufacture of mission-critical fluid, power, heat transfer and vacuum technologies for the defense, space, energy and process industries, today announced that Daniel J. Thoren, President and Chief Executive Officer, and Matt Malone, Vice President and General Manager - Barber-Nichols, will present virtually at the Gabelli Pump, Valve & Water Systems Symposium on Thursday, Feb. 22.

The Graham presentation is scheduled to begin at 3:15 p.m. Eastern Time. A live audio webcast of the event with accompanying slides will be available at GHM Investor Relations. An archive of the presentation will be available at the same link following the conference.

Tompkins Community Bank promotes Todd Ferrara to new leadership role

By Press Release

Press Release:

todd-ferrara-edit-1.jpg
Photo of Todd Ferrara courtesy of Tompkins.

An expansion of its small business lending (SBL) team, Tompkins Community Bank has appointed Todd Ferrara to a newly created role, SBL business line manager. Ferrara will oversee Tompkins’ SBL underwriters, lending assistants, and market-based managers across New York and Pennsylvania, working to drive growth among target segments while delivering a top-notch customer experience.

“Small Business Lending is an area that is critical to the success of Tompkins and our local communities.  We are focused on delivering high-quality products and experiences to the small business customers we serve,” said Thomas Evans, enterprise credit administration officer at Tompkins. “As part of fulfilling that mission, establishing a dedicated leadership position and filling it with a high-caliber individual is a critical step.  Todd is a demonstrated leader with proven capabilities in this regard.  It is with high conviction that we put Todd in this position and look forward to him delivering for Tompkins and our customers.”

Previously, Ferrara served as the business development officer for Tompkins’ Philadelphia footprint. A 25-year veteran of the banking industry, Ferrara has ample experience leading teams in small business and cash management.

“Todd joined Tompkins just over a year ago and has since established himself as a dynamic, capable leader,” said Ginger Kunkel, president of Tompkins’ Pennsylvania market. “His dedication to a supportive and collaborative work environment embodies the values that Tompkins holds paramount and we all look forward to watching Todd grow in this new role.”

A graduate of Juniata College, Ferrara currently serves as board secretary for the Boys and Girls Club of Chester, Pennsylvania, a position he has held for the past three years. He and his family are also longtime supporters of Speranza Animal Rescue and have fostered and rescued several from the organization. He lives in Royersford, Pennsylvania with his wife, Jill, and is father to one daughter and two stepchildren.

Facing challenges and skeptics, Plug Power officials say new plant expected to begin production in 2025

By Howard B. Owens
plug power WNY STAMP
Plug Power in WNY STAMP.
Photo by Howard Owens.

The company's share price hasn't risen above $5 in four months after executives informed investors that it is facing a cash flow problem, and while it has made progress on improving its cash holdings and has increased production at plants in Tennessee and Georgia, there are stock analysts downgrading Plug Power as an investment opportunity. 

Even so, Plug Power's leadership indicates the company is plowing ahead with plans to build the nation's leading fully integrated hydrogen power supply company -- a revolution in alternative energy production if Plug Power can pull it off.

One component of that plan is the completion of a hydrogen fuel production facility and electric substation at WNY STAMP, and officials with the company say the project remains on course for production to begin in the first half of 2025.

In collaboration with the New York Power Authority and National Grid, Plug Power expects to achieve its full capacity of 74 tons per day of liquid hydrogen production within that time frame.

"At this point, the majority of the work on-site to date has been laid underground to support the incoming power, drainage, and water management demands of a functional green hydrogen plant," officials said in a statement to The Batavian.

In accordance with Security and Exchange Commission Rules, Plug Power disclosed in November that a shortage of cash threatened its ability to remain a "going concern" within the following 12 months.  It suggested it could raise more cash by selling stock and that the company expected to receive a sizable loan from the Department of Energy.

Since then, Plug Power authorized B. Riley Securities to offer additional public shares of the company for sale at market rate with the goal of raising an additional $1 billion in capital.  That agreement was announced in January.  There has been no news released on how that sale has proceeded.

Also, in January, Plug Power secured a $1.6 billion loan from the Department of Energy to help it complete six liquid hydrogen facilities (including, presumably, the facility at WNY STAMP).  Plug Power is expected to receive the funds later this year. CORRECTION: Contrary to the news article cited, the loan has not been finalized, but according to a company representative, the company took another step in the due diligence process toward finalizing the loan.  The representative said that Plug Power is at Step 3 of the process in the charge on this page.

Buffalo-based Investigative Post reported on Jan. 30 that the Tonawanda Senecas opposed the loan and were actively lobbying to stop it from going forward.

The Seneca Nation is invested in solar power.

Two days ago, Seaport Res Ptn, a stock analyst firm, downgraded Plug Power from a "buy" position to "neutral," which made headlines in the business press. The Seaport researches projected lower earnings this year for Plug Power.

A New York-based company (Latham) was founded in 1999 and has yet to turn a profit.  In its most recent earnings report, in September, it reported $890 million in revenue, a record for the preceding 12 months and a 38 percent year-over-year improvement.  Over the same period, the company lost $283.5 million.

In January, Plug Power began fuel production at its new plant in Woodbine. Georgia. The plant is designed to produce 15 tons per day of liquid electrolytic hydrogen, which the company says can power 15,000 forklifts per day. 

Two days ago, the company resumed fuel production in Charleston, Tenn. That plant produces 10 tons of liquid hydrogen per day.

The two facilities coming online are expected to reduce Plug Power's cost of production and improve its move toward profitability. 

The company's specialty is green hydrogen, which is hydrogen produced without fossil fuels powering the facilities, and then that hydrogen, when used as a fuel source, results in zero carbon emissions. (More info: Forbes Magazine video about green hydrogen featuring Plug Power)

Plug Power's long-term goals are enterprising -- to be the market leader in green hydrogen. It is building a "vertically integrated" business model, which means it can provide customers with hydrogen services in a variety of ways.  For an idea of vertical integration, think of Apple. From Apple, you can get an iPhone, iPad, computer, or even earbuds that all work together seamlessly.

Plug Power aims to provide customers with fuel cells, electrolyzers (splitting water into hydrogen and oxygen), to liquid hydrogen fuel. They even provide companies like Walmart and Amazon with hydrogen-powered forklifts.  Plug Power wants to provide distribution, delivery, and services and foresees a future for hydrogen that includes uses such as long-haul trucking.

Companies and consumers looking to hydrogen as a green-energy alternative to fossil fuels face many challenges, and Plug Power is attempting to provide solutions to those challenges. The nation currently provides little in the way of hydrogen production and infrastructure, according to industry analysts.  

Plug Power's challenges include competition from other fuel sources, including natural gas, solar, and wind, as well as the steep price of building an entirely new vertically integrated infrastructure that can meet global demand.

In an interview with a green energy podcast, Plug Power CEO Andy Marsh said hydrogen power is under attack from industry leaders who believe electricity is the only solution to carbon-driven climate change.

"It's folks who really don't want hydrogen to be part of the solution, and I would contend they really don't understand," Marsh said. "I would like them to explain to me how you clean up long-haul trucking. I'd like them to explain how you do the last mile for 30 percent of the applications. I like them to explain how you do a fertilizer. I like them to explain how you do steel, which represents six or seven percent of the world's carbon footprint -- electricity solves none of that, and it's rather frustrating that if you're really thinking about how, from a system point of view, you clean up greenhouse gas. It's not really possible with their solutions."

He said solving climate change will take all of the green energy alternatives, even including nuclear power.

Plug Power's executives have set ambitious goals -- producing 2,000 tons of hydrogen daily by 2030. At that rate, the company hopes to generate $20 billion in annual revenue at that point with a profit margin of at least 30 percent.  

According to  Marsh, one ton of green hydrogen is the fuel equivalent of 2,000 gallons of gasoline. 

The company selected WNY STAMP for the construction of a liquid hydrogen plant in February 2021.  The plant will cost more than $290 million to complete. 

Empire State Development is scheduled to pay up to $2 million in Excelsior Tax Credits in exchange for the creation of 68 jobs at the plant, or about $2,941 per job per year over 10 years. Plug Power is not eligible to receive the tax credits until the jobs are filled. The average starting salary is expected to be approximately $70,000 plus benefits.

As part of the project, Plug Power agreed to invest $55 million in a 450-megawatt electrical substation that will make electricity available to other WNY STAMP tenants.

The company received $118.2 million in sales and property tax exemptions from the Genesee County Economic Development Center. Over the 20-year life of the property tax extensions, Plug Power will make payments in lieu of taxes totaling $2.3 million annually, which will be shared by Genesee County, the Town of Alabama, and the Oakfield-Alabama School District.  Each jurisdiction will also receive an increasing amount of property tax payments each year over the life of the agreement.

The STAMP plant, based on available descriptions of the other plants operated by Plug Power, would be the company's highest capacity plant.

If Plug Power were to go out of business, there's no information available on what might become of the hydrogen fuel facility. When Pepsi/Muller closed its plant in Batavia, followed by the failure of Alpina, both plants readily found new operators in HP Hood and Upstate Milk Cooperative, respectively; while there are other hydrogen companies and other energy companies, it's unknown if any would be interested in the Plug Power facility if it became available.

For previous Plug Power coverage, click here.

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Photo by Howard Owens.
plug power
Photo courtesy Plug Power.
plug power WNY STAMP
Photo courtesy Plug Power.

Graham Corporation gross margin expands 660 basis points on sales of $43.8 million in third quarter of fiscal 2024

By Press Release

Press Release:

Graham Corporation (NYSE: GHM) (“GHM” or the “Company”), is a global leader in the design and manufacture of mission-critical fluid, power, heat transfer, and vacuum technologies for the defense, space, energy, and process industries, today reported financial results for its third quarter ended December 31, 2023 (“third quarter fiscal 2024”).  Results include approximately two months of operations from the P3 Technologies, LLC (“P3”) acquisition, which was completed on Nov. 9.  

“Third quarter results were strong and we believe further demonstrated the continued execution of our strategy that is centered on driving quality top-line growth with margin accretive projects in order to improve our future earnings power,” commented Daniel J. Thoren, President and Chief Executive Officer.  “There were several highlights during the quarter, which included improved financial performance with expanded gross and adjusted EBITDA margins1, strong bookings which drove record backlog of nearly $400 million, and a new lower cost, more flexible credit facility.

“Equally noteworthy was the acquisition of P3, a strategic bolt-on business that is already enhancing our turbomachinery solutions and Graham’s margin profile.  Importantly, our strong cash generation during the quarter enabled us to pay off nearly all the debt utilized in acquiring P3.”

Mr. Thoren concluded, “We believe our business is in a much-improved position given the strategic and necessary actions taken over the last few years.  As we look forward, we are confident we can continue to execute our strategy and capitalize on the many opportunities in front of us.  We are also focused on further elevating GHM by driving a collaborative spirit across our brands, leveraging best practices, and progressing employee development in support of our core capabilities.”

Photo: Workers install siding on Ellicott Station

By Howard B. Owens
ellicott station crew
Photo by Howard Owens

While the pace of work at Ellicott Station has slowed to a crawl since August, when Sam Savarino announced he was closing his development company, there continues to be the occasional contractor on the site doing some work.

On Wednesday, there was a two-man crew putting more siding on the front of the apartment building under construction.

There has yet to be an announcement from local officials or Savarino about the future of the project.  There is reportedly a search underway to find a new contractor to complete the project, which is potentially hampered by a very low-income requirement for renters from the Office of NYS Homes and Community Renewal, but officials have yet to reveal any progress on that front.

For previous coverage of Ellicott Station, click here.

Goodwill cuts ribbon on expanded retail space, drive-up donation center at Batavia location

By Howard B. Owens
goodwill batavia ribbon cutting
Goodwill officials and Chamber of Commerce leaders celebrate the store's expansion in Batavia on Friday morning with a ribbon cutting.
Photo courtesy WBTA.

Batavia's Goodwill store at 4152 West Main St. celebrated its expansion Friday morning with a ribbon cutting hosted by the Genesee County Chamber of Commerce.

The expansion doubled the thrift store's retail space and added a covered drive-up donation center.

Goodwill has operated at its current location since May 2013 and has been expanded from 9,285 to 21,506 square feet and now has 18 full- and part-time employees.

Goodwill officials say the location is now one of the agency's largest in Western New York.  It features an open layout allowing it to expand space for donated men’s, women’s, and children’s clothing. The store also features a broad array of previously owned housewares, decorative items, small appliances, electronics, and furniture.  

“With individuals and families looking for ways to cut their clothing and household budgets, we are proud to be able to expand our offerings in Batavia,” said Thomas Ulbrich, Goodwill of Western New York president and CEO, in a statement. “We serve a very wide range of customers from all across Genesee County, and we are proud to be a resource for families in such a great community.”

The drive-up donation center is on the side of the building facing Main Street and offers donors a quick and convenient -- and covered -- way to donate gently used, unwanted items to the store to support workforce development programs across the region.

The story is open from 9 a.m. to 8 p.m. Monday through Saturday and 10 a.m. to 5 p.m. on Sundays.

First local black barbershop owner holds open house to mark start of Black History Month

By Howard B. Owens
brandon-armstrong-royals-barber-shop
Royals Barber Shop owner Brandon Armstrong with barbers Julio Vazquez and Stephen Wapniewski
Photo by Howard Owens.

As far as Brandon Armstrong knows, his is the only black-owned barbershop, in Genesee County.

In honor of Black History Month, Armstrong held an open house on Thursday morning, with coffee and donuts, to both celebrate the month and to officially unveil his new logo and new business model for Royals Barber Shop at 317 Ellicott St., Batavia.

When Armstrong opened his first barbershop at Ellicott and Liberty (now Eden Cafe) in 2011, it was likely the first new barbershop in Batavia in a number of years, after a long period in which stylists were in vogue and barbers were passé. In the years since, four or five new barbershops have opened locally, though a couple didn't last long.

More than a dozen years since that first venture, Armstrong is still in the barbering business, and he says he's stuck with it both because it's a lucrative business and because he enjoys it.

"I feel like it's one where you can be yourself a little bit more," Armstrong said. "It's nothing too uptight, but it's still super professional. You can still be yourself. A lot of it's not really too hard of work, I feel like, but it still can be hard work. It's an equal balance of everything."

The new logo comes with a change in the business that he hopes will serve the business better, his customers better, and his employees better.  Unlike most salons and barbershops, his barbers are members of the staff, earning an hourly rate plus commissions.  It's no longer like they own their own businesses, with all the consequences and responsibilities that go with being self-employed, but they're getting a regular paycheck.

"Now they're bankable barbers -- that's my thing, being bankable barbers," Armstrong said. "Being bankable barbers means they will be able to bring their pay stubs to the bank and get a house or get a loan for a car."

Armstrong said with employees instead of contractors, he will be able to better maintain regular hours, which will benefit customers.  Also, with booth rental, there is also a cap on how much money can flow into the business.

"From what I'm learning is that you can't really scale the business, if you aren't being able to profit the right amount and put it back into your business," Armstrong said. "This way, we're able to get some money flowing through the business and be able to get loans for the business. It means being able to scale the business."

Now that he's a proven entrepreneur with a track record of success, what advice does he have for young people in the community, particularly people of color, in light of Black History Month, who are drawn toward going into business for themselves?

"Be the best that you can be," Armstrong said. "Work the hardest. You can outwork your competition. Whatever you're involved with, you have to practice at it, and you have to become the best at what you do. Try to be the best at what you do. Practice makes perfect. Whatever it is that you're involved in, make sure you're practicing and working hard, and it'll pay off."

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Photo by Howard Owens.

Graham Corporation announces third quarter fiscal year 2024 financial results

By Press Release

Press Release:

Graham Corporation (NYSE: GHM), a global leader in the design and manufacture of mission-critical fluid, power, heat transfer, and vacuum technologies for the defense, space, energy, and process industries, announced that it will release its third quarter fiscal year 2024 financial results before financial markets open on Monday, Feb. 5.

The Company will host a conference call and webcast to review its financial and operating results, strategy, and outlook. A question-and-answer session will follow.

  • Third Quarter Fiscal Year 2024 Financial Results Conference Call 
  • Date: Monday, Feb. 5
  • Time: 11:00 a.m.
  • Phone: (201) 689-8560

Internet webcast link and accompanying slide presentation: ir.grahamcorp.com.

A telephonic replay will be available from 3:00 p.m. on the day of the teleconference through Monday, February 12, 2024.  To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13743383 or access the webcast replay via the Company’s website at ir.grahamcorp.com, where a transcript will also be posted once available.

Click here for the entire release.

Tompkins Financial Corporation reports fourth quarter financial results

By Press Release

Press Release:

Tompkins Financial Corporation ("Tompkins" or the "Company") reported diluted earnings per share of $1.05 for the fourth quarter of 2023, down 22.8% compared to the fourth quarter of 2022. Net income for the fourth quarter of 2023 was $15.0 million, down $4.5 million or 23.3% compared to the $19.5 million reported for the fourth quarter of 2022.  Contributing to the lower quarterly results were increased funding costs and increased operating expenses, which included costs related to three branch closures during the fourth quarter of 2023 as well as personnel-related charges.

For the year ended December 31, 2023, diluted earnings per share of $0.66 were down 88.8% compared to the year ended December 31, 2022.   Net income for 2023 was $9.5 million, a decrease of $75.5 million compared to the year ended December 31, 2022.  Significant contributors to the year-over-year decrease in net income included a previously announced after-tax loss of $52.9 million, or $3.69 loss per diluted share, related to the sale of $510.5 million of available-for-sale debt securities, increased funding costs and an increase in operating expenses. The sale of securities and subsequent reinvestment in the second and third quarters of 2023 is favorably impacting securities revenue as the securities sold had an average yield of 0.86%, while the proceeds of the sale were largely reinvested into securities with an estimated yield of approximately 5.09%.  Average yields on securities for the fourth quarter of 2023 were 2.33%, compared to 1.59% for the third quarter of 2023, and 1.44% for the fourth quarter of 2022.    

Tompkins President and CEO, Stephen Romaine, commented, "In the fourth quarter we continued to execute on strategic initiatives and are pleased to announce our expanded presence in Syracuse with the grand opening of our City Center office.  For the quarter we saw positive momentum with our net interest margin expanding, strong quarterly loan growth driving full-year loan growth of 6.4%, signs of stabilization in our deposit base, and growth in our noninterest-related revenue. During the quarter we also recognized non-recurring expenses relating to three branch closures and other personnel-related expenses intended to help offset future expense growth.  While the economic environment remains challenging for the industry we look forward to 2024 with our strong capital and liquidity position to continue to drive growth of quality customer relationships."

SELECTED HIGHLIGHTS FOR THE PERIOD:

Net interest margin for the fourth quarter of 2023 expanded to 2.82%, compared to 2.75% for the third quarter of 2023. 

Total loans at December 31, 2023, were up $171.1 million, or 3.2% (12.6% on an annualized basis), compared to the immediate prior quarter, and up $337.0 million, or 6.4%, from December 31, 2022.

Total deposits at December 31, 2023 were $6.4 billion, down $223.6 million, or 3.4% (13.5% on an annualized basis), from September 30, 2023, and down $202.5 million, or 3.1%, from December 31, 2022.

Loan to deposit ratio was 87.6%, compared to 82.1% for the immediate prior quarter.

Regulatory Tier 1 capital to average assets was 9.08% at December 31, 2023, compared to 9.01% at September 30, 2023 and 9.34% at December 31, 2022.

NET INTEREST INCOME

Net interest income was $52.4 million for the fourth quarter of 2023, up from $51.0 million for the third quarter of 2023 and down from $57.3 million for the fourth quarter of 2022. Net interest margin was 2.82% for the fourth quarter of 2023, compared to 2.75% reported for the third quarter of 2023 and 3.02% reported for the fourth quarter of 2022. The increase in net interest income and net interest margin during the fourth quarter of this year compared to the third quarter of 2023 was primarily due to securities purchased in the second and third quarters of 2023 yielding higher interest rates compared to securities sold during the same periods. The increase in securities yields was partially offset by the reversal of $1.0 million of accrued interest during the fourth quarter related to loans that moved to nonaccrual status during the quarter, as described further below under the heading Asset Quality.  The decreases in net interest income and net interest margin compared to the fourth quarter of last year were primarily attributable to increased interest costs on interest-bearing liabilities outpacing increased interest income on interest-earning assets due to the higher interest rate environment. 

For the year ended December 31, 2023, net interest income was $209.5 million, down $20.8 million, or 9.0%, when compared to the same period in 2022.  

Average loans for the quarter ended December 31, 2023, were up $101.5 million, or 1.9%, from the third quarter of 2023, and were up $277.0 million, or 5.3%, compared to the quarter ended December 31, 2022. The increase in average loans over both prior periods was mainly in the commercial real estate portfolio. The average yield on interest-earning assets for the quarter ended December 31, 2023, was 4.3%, which was up from 4.1% for the quarter ended September 30, 2023, and up from 3.6% for the quarter ended December 31, 2022.

Average total deposits for the fourth quarter of 2023 were up $58.4 million, or 0.9%, compared to the third quarter of 2023, while period-end balances were down $223.6 million compared to the third quarter of 2023 driven by seasonal deposit trends.  Average deposits for the quarter were down $227.8 million, or 3.4%, compared to the same period in 2022. The decrease compared to the prior year was largely driven by inflation and persistent rate competition for deposits due to the current interest rate environment and tightening monetary policy. The cost of interest-bearing deposits increased to 2.04% for the fourth quarter of 2023, compared to 1.74% for the third quarter of 2023, and 0.69% for the fourth quarter of 2022. The cost of interest-bearing deposits for the fourth quarter of 2023 increased 135 basis points compared to the fourth quarter of 2022, and 123 basis points for the year ended December 31, 2023 compared to the same period in 2022. The ratio of average noninterest bearing deposits to average total deposits for the fourth quarter of 2023 was 29.6% compared to 31.0% for the third quarter of 2023, and 30.8% for the year ended December 31, 2023.  The average cost of interest-bearing liabilities for the fourth quarter of 2023 of 2.25% represents an increase of 27 basis points over the third quarter of 2023, and an increase of 141 basis points over the same period in 2022.  

NONINTEREST INCOME

Noninterest income of $18.9 million for the fourth quarter of 2023 was up 2.7% compared to the same period in 2022.  The increase was mainly due to gains on securities transactions of $46,000 compared to losses on securities transactions of $455,000, and increases in fee-based revenues which include insurance commissions and fees, up $143,000, wealth management fees, up $181,000 and card services income, up $68,000.  

Noninterest income for the year ended December 31, 2023, was $10.2 million, which represents a decrease in noninterest income of $67.7 million compared to the same period in 2022.  The decrease in noninterest income was largely due to the previously noted sales of available-for-sale debt securities, mainly in the third quarter of 2023, which resulted in the recognition of a pre-tax loss of $70.0 million for the year ended December 31, 2023. Fee-based revenues, including insurance commissions and fees, wealth management fees, service charges on deposit accounts, and card services income, for the year ended December 31, 2023, were collectively up $1.0 million, or 1.4%, over the same period in 2022.  

NONINTEREST EXPENSE

Noninterest expense was $51.3 million for the fourth quarter of 2023, which was up $1.1 million, or 2.2%, over the fourth quarter of 2022.  The increases were mainly in premises and furniture and fixtures, up $799,000, and other operating expenses, up $1.7 million; partially offset by lower salaries and wages. The increase in premises and furniture and fixtures was mainly due to $720,000 of expenses related to branch closures. Contributing to the increase in other operating expenses were: FDIC expenses, up $723,000; technology, up $434,000; expenses related to the Company's retirement plans, up $428,000; charitable contributions and donations, up $315,000; and accrual for New York State minimum tax, up $207,000.  Salaries and wages included $638,000 of personnel-related charges, which were more than offset by lower incentive-related accruals.

For the year-to-date period, noninterest expense of $203.3 million was up $7.5 million, or 3.9%, from the same period in 2022. The increase in noninterest expense for the year ended December 31, 2023, over the same period in 2022 was mainly in employee benefits and other noninterest expenses. The increase in employee benefits was mainly in health insurance, which was up $1.8 million. Salaries and wages were down as annual merit increases were offset by lower incentive-related accruals. Contributing to the increases in other expenses were the following:  FDIC insurance, up $1.5 million; New York State minimum tax expense, up $830,000; professional fees, up $604,000; and charitable donations, up $317,000.  Premises and furniture and fixtures expenses were up over the prior year mainly as a result of expenses related to branch closures of $879,000.

INCOME TAX EXPENSE

The provision for income tax expense of $3.1 million for an effective rate of 17.2% for the fourth quarter of 2023, compared to tax expense of $4.5 million and an effective rate of 18.6% for the same quarter in 2022. The fourth quarter of 2023 included the impact of surrendering certain separate account BOLI policies, which added $1.8 million to tax expense for the quarter.  For the year-ended 2023, the provision for income tax expense of $2.5 million for an effective rate of 20.6% compared to tax expense of $24.6 million and an effective rate of 22.4% for the same period in 2022. The decrease in income tax expense between comparable periods reflects the decrease in pre-tax income, due primarily to the realized losses on the sale of certain available-for-sale securities.    

ASSET QUALITY

The allowance for credit losses represented 0.92% of total loans and leases at December 31, 2023, up from 0.91% at September 30, 2023, and up from 0.87% at December 31, 2022. The ratio of the allowance to total nonperforming loans and leases was 82.84% at December 31, 2023, compared to 156.96% at September 30, 2023, and 139.86% at December 31, 2022.  The decrease in the ratio compared to prior periods was due to the increase in nonperforming loans and leases discussed in more detail below.  

Provision for credit losses for the fourth quarter of 2023 was $1.8 million compared to $1.4 million for the same period in 2022. Provision for credit losses for the year ended December 31, 2023, was $4.3 million, compared to $2.8 million for the year ended December 31, 2022. The increase in provision expense for both the quarter and year-to-date periods was mainly driven by loan growth, economic forecasts, and changes in asset quality. Net charge-offs for the fourth quarter of 2023 were $410,000 compared to net charge-offs of $190,000 reported for the same period in 2022.

Nonperforming assets represented 0.80% of total assets at December 31, 2023, up from 0.41% reported at September 30, 2023, and 0.43% at December 31, 2022. At December 31, 2023, nonperforming loans and leases totaled $62.3 million, compared to $31.4 million at September 30, 2023, and $32.8 million at December 31, 2022. The increase in nonperforming loans at quarter-end December 31, 2023, was mainly due to the addition of one relationship with two commercial real estate properties in the hospitality portfolio totaling approximately $33.8 million. The Company believes that the existing collateral securing the loans is sufficient to cover the exposure as of December 31, 2023.  These loans were included in loans past due 30-89 days and accruing at the end of the third quarter of 2023.  Loans past due 30-89 days and accruing as a percentage of total loans decreased from 0.75% at the end of the third quarter of 2023 to 0.08% at the end of the fourth quarter of 2023.

Special Mention and Substandard loans and leases totaled $123.1 million at December 31, 2023, reflecting an increase from the $122.9 million reported at September 30, 2023, and $98.3 million reported at December 31, 2022.  

CAPITAL POSITION

Capital ratios at December 31, 2023, remained well above the regulatory minimums for well-capitalized institutions. The ratio of total capital to risk-weighted assets was 13.36% at December 31, 2023, compared to 13.46% at September 30, 2023, and 14.42% at December 31, 2022. The ratio of Tier 1 capital to average assets was 9.08% at December 31, 2023, compared to 9.01% at September 30, 2023, and 9.34% at December 31, 2022.

LIQUIDITY POSITION

The Company's liquidity position at December 31, 2023, was stable and consistent with the immediately prior quarter. Liquidity is enhanced by ready access to national and regional wholesale funding sources including Federal funds purchased, repurchase agreements, brokered deposits, Federal Reserve Bank Discount Window advances and Federal Home Loan Banks (FHLB) advances. The Company maintains ready access liquidity of $1.4 billion, or 18.3% of total assets as of December 31, 2023.  As a member of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. At December 31, 2023, the Company had an available borrowing capacity at the FHLB of $642 million. Through various programs at the Federal Reserve Bank, the Company has the ability to use certain unencumbered mortgage-related assets and securities to secure borrowings from the Federal Reserve Bank's Discount Window. At December 31, 2023, the available borrowing capacity with the Federal Reserve Bank was $92.6 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, at December 31, 2023, the Company maintained $687.0 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity.

GCEDC consultant mapping out career paths with local businesses for area students

By Howard B. Owens
Shelia Eigenbrod gcedc
Shelia Eigenbrod, education consultant for GCEDC, making a presentation to the GCEDC board of directors on Thursday.
Photo by Howard Owens.

When you're charting a new path, you need a roadmap, and Shelia Eigenbrod, a year into her new job with the Genesee County Economic Development Center, has exactly that in mind.

The map would help inform high school students about career opportunities in Genesee County and what it might take to land the jobs that will put them on a path to a good salary with no college debt.

Eigenbrod, a retired Pavilion Middle School principal, is GCEDC's education consultant.

She told The Batavian after a GCEDC board of directors meeting on Thursday that her roadmap project is "very exciting."

"It's like a typical old-school map," Eigenbrod said. "It unfolds. It will contain all of the industries in Genesee County, especially those focused on advanced manufacturing. It'll designate the types of hires, whether it's engineers, skilled trades, technicians, or apprenticeship programs, and will have a lot of descriptions so that students and school counselors understand what mechatronics is, what CNC is, what advanced manufacturing is, and will also connect to workforce development."

The roadmap was the focus of her presentation on Thursday to the GCEDC board.

"This is something that is meant to be attractive to and understandable for all the guidance counselors and school officials," Eigenbrod said. "It's also something easier to hand out to students. I know we're going to compete with a lot of college materials, the mountain of stuff every graduating senior gets, but really, the message here is all the great careers we have in our community that are, no doubt, we have training programs already set up in our BOCES (and at Genesee Community College)."

She expects the map to be a nice handout at school open houses, parent meetings, and career fairs.

"We've identified a lot of the companies in Genesee County," Eigenbrod said. "We're going to have descriptors of what the company produces, their type of workforce, number of people if they're intending to hire, and if they are looking for apprenticeships, skilled trades, engineers, and technicians."

In response to board questions, she said she also expects to include information on local businesses in need of back-office help, such as accountants and other financial workers.

The map will point students to resources for training for the type of jobs available.

"I really want educators to understand what is going on, and these career pathways," she said.

Former Alex's chef moves from the art of cooking to the art of HVAC

By Howard B. Owens
Hassan Silmi Lion HVAC
Hassan Silmi.
Photo by Howard Owens

How big of a leap is it to go from chef at one of Batavia's best restaurants to owning your own heating and air conditioning installation and repair business?

Not as far as you might think, says Hassan Silmi, who spent a decade in the kitchen of Alex's Place on Park Road to owning Batavia-based Lion HVAC.

In a busy kitchen, Silmi noted, things break, things that are often in need of immediate repair. So when things broke, Silmi set aside his sauté pan and picked up a screwdriver or wrench.

"It's one of those things where maybe I could figure out, get this thing running again and not ruin my Friday or my Saturday cooking at the restaurant," Silmi said. "Besides, whoever you're going to call on a Friday or Saturday night, they will charge you exorbitant money, and that's usually when everything breaks at the restaurant. So it was one of those things -- I could figure it out."

There's also, like cooking, a creative aspect to HVAC work. You might work off a menu, preparing preset recipes, but sometimes you just have to find the right way to do something different.

"There's still a decent amount of puzzle figuring things out," Silmi said. "I could install a furnace, and another guy could easily look at it completely differently and take, you know, the utilities from any direction. Everyone has their own visual look at how they are going to hook it up. How are we going to connect to the boiler? How are we going to branch this system out? The ductwork. One company's work isn't going to look the same if I do it or some other company does it. There's enough diversity, but to the average person, it's like, how it works is how it works."

Silmi is a Batavia High School graduate and went through the culinary arts program at BOCES.  While BOCES exposed him to the idea of working in a trade, he said even then, he could have chosen a different path. 

"There were a lot of things that intrigued me," Silmi said. "I could have easily gone into auto, or I could have easily gone into carpentry or easily went into heating and cooling, but I was intrigued by food at one point. It (BOCES) was definitely helping to keep the mindset to want to stay in the trades."

During his years in the restaurant business Silmi did well enough and managed his money well enough that he could buy some rental properties.  That was the next phase of his move toward entering the heating and cooling business.  He had to be his own handyman on his rental properties.

"It was always one of those things where I enjoyed the mechanical aspect of everything," Silmi said.

A few years ago, he decided to leave his job at Alex's Place and enroll in the HVAC program at Monroe Community College. While there, he took additional electrical classes, additional plumbing classes, as well as welding.

He started doing work for friends and family, and he had a neighbor who was a contractor. He was struggling to find trade help, so he started working with him, and that led to Silmi thinking, "I can make this work."

He struck out on his own nearly a year ago.  

While he's a one-man operation, he said he's keeping busy doing both commercial and residential work.

By background and training, he said, he's become a bit of a jack-of-all-trades.

"I find myself, like, 'Oh, your dryer's not working. Let me take a look at it," Silmi said. "But in order to go heating and cooling, it's really because you have to know gas, you have to know electric, you have to know plumbing. You can't just dabble in things."

DiMatteo and Roach partner with Marshall Kelly Esq. effective Jan. 1

By Press Release

Press Release:

With great pleasure, we announce that effective January 1, our firm will be known as DiMatteo, Roach & Kelly, Attorneys at Law. This change marks the addition of our new partner, Marshall Kelly, Esq., a longstanding member of the local legal community. 

His experience will expand our diverse practice into the area of criminal law and will support our already busy probate and estate administration practice. 

As we look back on thirty-four years of representing clients in Wyoming, Genesee, Livingston, and Allegany Counties, and beyond, we are thankful for the relationships we have developed and the trust that our clients and colleagues have in the professional services our dedicated team provide.

Looking forward, we are proud to say that our firm is stronger than ever. We are eager to bring that strength to bear as our collective goal continues to be a law practice where trust, personal care, excellence, and friendship define success for our clients and ourselves.

Tompkins Insurance appoints Katelyn Fowler as training team leader

By Press Release

Press Release: 

katelyn-fowler.jpg
Submitted photo of 
Katelyn Fowler.

Creating and filling a newly developed position within the company, Tompkins Insurance Agencies has named Katelyn Fowler training team leader. In this post, Fowler will onboard all newly hired commercial insurance account managers and account executives to ensure that all programs, processes, and procedures align with the company’s high standards of excellence. She will also train and share client service practices with current employees as the agency’s standards and client needs evolve. Fowler will report out of the Ithaca headquarters and work with teams across all Tompkins Insurance Agencies offices in Central New York, Western New York, and Southeast Pennsylvania.

Fowler is an insurance industry veteran with more than 15 years of commercial lines expertise. Ten years of that experience took place at Tompkins Insurance Agencies where, as commercial lines marketing specialist, she fostered relationships with underwriters to help achieve agency goals, assisted producers and the small business team with market and insurance knowledge, and oversaw a large book of business for the agency. She returns to Tompkins Insurance Agencies after serving as commercial lines marketing manager for Reagan Companies in Marcellus, New York, where she managed a team of account executives and handled carrier relations.

“It’s a pleasure to welcome Katelyn back to the Tompkins team in this newly formed position,” says Kim Nevinger, vice president and commercial insurance department manager, at Tompkins Insurance Agencies. “With Katelyn’s experience in both account management and marketing, as well as her history with Tompkins Insurance Agencies, she has a deep understanding of all aspects of the business, both internal and external. Her appointment as training-team leader represents our commitment to excellence for both employees and clients of Tompkins Insurance Agencies, and we have no doubt she’ll succeed in this role.”

As a five-time honoree of the Independent Insurance Agents & Brokers of America “Best Practices” agency designation, and a “Best Agency to Work For” distinction given thanks to employee votes in multiple regional and national rankings, employee growth and client service excellence are important values to the Tompkins Insurance Agencies leadership. With a training team leader in place to handle the process and training responsibilities that were once handled by the individual market team leaders and account managers, leaders can now focus on the team’s efficiency and consistency. “The end result is a happier and more supported team, who can bring even more consistency, reliability, and excellence to clients,” adds Nevinger. “The development of the training-team leader position represents our promise of providing personalized, premium, and top-tier services to our commercial clientele.”

Graham to present at 19th annual Emerging Growth Equity conference, webcast Dec. 5

By Press Release

Press Release:

Graham Corporation (NYSE: GHM) (“GHM” or the “Company”), a global leader in the design and manufacture of mission-critical fluid, power, heat transfer, and vacuum technologies for the defense, space, energy, and process industries, today announced that Daniel J. Thoren, President and CEO, and Christopher J. Thome, Vice President - Finance and CFO, will present and host investor meetings at the Noble Capital Markets 19th Annual Emerging Growth Equity Conference in Boca Raton, FL on Monday, Dec. 4, and Tuesday, Dec. 5.

A webcast of the Graham presentation, along with presentation materials, will be available on the Company's investor relations website starting at 2 p.m. ET on Tuesday, Dec. 5.

Oak Orchard Health earns quality recognition badges

By Press Release

Press Release:

Oak Orchard Health (OOH) was awarded the Community Health Quality Recognition (CHQR) Badges for Health IT and Patient-Centered Medical Home (PCMH) by the Health Resources & Services Administration (HRSA). CHQR badges recognize Health Centers that have made notable achievements in the areas of access, quality, health equity, health information technology, social risk factors screening, and COVID-19 public health emergency response using Uniform Data System (UDS) from the most recent reporting period.

“We’re excited to receive this recognition, especially the Health IT badge. With a vast base of over 30,000 patients in rural areas, technology helps us keep our patients healthy. Whether it’s by using our electronic medical records system or our patient portal, our providers and patients have access to information that helps Oak Orchard diagnose and treat our patients efficiently,” said Karen Kinter, CEO, Oak Orchard Health.

Oak Orchard Health was awarded the Health IT badge because it met all the following criteria:  

  1. Adopted an electronic health record (EHR) system.
  2. Offered telehealth services.
  3. Exchanged clinical information online with key providers' health care settings. 
  4. Engaged patients through health IT.
  5. Collected data on patient social risk factors.

“Oak Orchard has been staying at the forefront of technology to document medical information efficiently and improve our access to patients. We encourage our patients to use the patient portal because they will have access to their medical information, be able to ask questions of their medical providers and request medication refills. Telehealth has been a breakthrough for our patients because of the challenges many have with transportation and other barriers that keep them from coming into the health centers. Now they can receive medical or behavioral health care from home using their telephone, tablet, or computer,” said Jason Kuder, Chief Information Officer, Oak Orchard Health.

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