Latest news with #GrafTechInternationalLtd
San Francisco Chronicle
25-07-2025
- Business
- San Francisco Chronicle
GrafTech: Q2 Earnings Snapshot
BROOKLYN HEIGHTS, Ohio (AP) — BROOKLYN HEIGHTS, Ohio (AP) — GrafTech International Ltd. (EAF) on Friday reported a loss of $86.9 million in its second quarter. On a per-share basis, the Brooklyn Heights, Ohio-based company said it had a loss of 34 cents. Losses, adjusted for non-recurring costs, came to 16 cents per share. The maker of graphite products posted revenue of $131.8 million in the period. _____
Globe and Mail
25-07-2025
- Business
- Globe and Mail
GrafTech Reports Second Quarter 2025 Results
GrafTech International Ltd. (NYSE: EAF) ("GrafTech," the "Company," "we," or "our") today announced its unaudited financial results for the quarter and six months ended June 30, 2025. Highlights Grew sales volume 12% year-over-year for the second quarter of 2025, resulting in GrafTech's highest sales volume performance since the third quarter of 2022. Continue to expect an approximate 10% year-over-year increase in sales volume for 2025 on a full-year basis, which would result in cumulative sales volume growth of approximately 25% since the end of 2023. Grew sales volume in the United States 38% year-over-year for the second quarter of 2025 and 32% for the first six months of 2025, reflecting our strategy to actively shift the geographic mix of our sales volume towards this key region. Achieved a 13% year-over-year reduction in cash costs per metric ton ("MT") for the second quarter of 2025. We now project a 7-9% year-over-year decline in our cash costs per MT for 2025 on a full-year basis, exceeding our previous guidance range of a mid-single digit percentage point decline. Generated positive EBITDA in the second quarter of 2025, reflecting continued progress on our path to normalized levels of profitability. Ended the second quarter of 2025 with total liquidity of $367 million; this strong liquidity position continues to support our ability to manage through the near-term, industry-wide challenges. Second Quarter 2025 Summary Sales volume of 28.6 thousand MT Net sales of $132 million Net loss of $87 million, or $0.34 per share (1), including a $43 million non-cash income tax expense related to a valuation allowance against certain deferred tax assets Adjusted EBITDA (2) of $3 million Net cash used in operating activities of $53 million Adjusted free cash flow (2) of negative $53 million CEO Comments "We continue to deliver on our key commercial, operational and financial objectives and targets, reflecting strong execution of our strategic initiatives and our absolute focus on managing all areas within our control," said Timothy Flanagan, Chief Executive Officer and President. 'Our ability to drive strong volume growth and expand our market share in key regions, despite a challenging commercial environment, demonstrates the strength of our customer value proposition and our focus on meeting customer needs. At the same time, our team is executing cost savings initiatives that will accelerate our return to normalized profitability as the market recovers." "Longer term, decarbonization efforts will continue to reshape steelmaking in the years ahead," continued Mr. Flanagan. "Specifically, we remain confident that the steel industry's ongoing shift toward electric arc furnace steelmaking will continue, driving long-term demand growth for graphite electrodes. The successful execution of our initiatives to manage the current market dynamics is serving to preserve our ability to remain the electric arc furnace industry's preeminent supplier of high-quality graphite electrode products and technical services. As a result, GrafTech is in a strong position to benefit from long-term favorable trends that will shape the future of our industry and deliver significant growth." Net sales for the second quarter of 2025 were $132 million, a decrease of 4% compared to $137 million for the second quarter of 2024. The decline primarily reflected a year-over-year decrease in our weighted-average realized price, partially offset by higher sales volume. Net loss for the second quarter of 2025 was $87 million, or $0.34 per share, compared to a net loss of $15 million, or $0.06 per share, for the second quarter of 2024. Net loss for the second quarter of 2025 included a $43 million non-cash income tax expense related to the establishment of a full valuation allowance against the Company's United States and Switzerland deferred tax assets. Adjusted EBITDA (2) was $3 million for the second quarter of 2025, compared to $14 million for the second quarter of 2024. The decline primarily reflected lower weighted-average realized prices, partially offset by a 13% reduction in cash costs on a per MT basis for the second quarter of 2025, compared to the same period in 2024, which reflects our ongoing initiatives to reduce our cost structure as well as the year-over-year improvement in our sales and production volume levels. Adjusted EBITDA (2) for the second quarter of 2024 included a $9 million benefit related to the reimbursement of legal fees and other related expenses in connection with the favorable outcome of an arbitration, which was recorded as a reduction in selling and administrative expenses. For the second quarter of 2025, net cash used in operating activities was $53 million and adjusted free cash flow (2) was negative $53 million, compared to net cash used in operating activities of $37 million and adjusted free cash flow (2) of negative $44 million for the second quarter of 2024. For the second quarter of 2025, cash paid for interest was $39 million, including $34 million of semi-annual interest payments on the Company's notes. Sales volume for the second quarter of 2025 was 28.6 thousand MT, an increase of 12% compared to the second quarter of 2024. For the second quarter of 2025, our weighted-average realized price was approximately $4,200 per MT. This represented a 12% decrease compared to the second quarter of 2024 but a sequential increase of 2% compared to the first quarter of 2025. The year-over-year decline reflected the substantial completion in 2024 of long-term sales agreements entered into in prior years, as well as persistent competitive pressures across all of our principal commercial regions. These impacts were partially mitigated by our initiative to actively shift more sales volume to the United States, which remains the strongest region for graphite electrode pricing. Production volume was 29.4 thousand MT for the second quarter of 2025, an increase of 10% compared to the second quarter of 2024. On a full-year basis, our expectation remains to balance our production and sales volume levels. Capital Structure and Liquidity As of June 30, 2025, we had total liquidity of $367 million, consisting of cash and cash equivalents of $159 million, $108 million of availability under our revolving credit facility and $100 million of availability under our senior secured first lien delayed draw term loans. Our strong liquidity position continues to support our ability to manage through the near-term, industry-wide challenges. As of June 30, 2025, we had gross debt (6) of $1,125 million, with substantially no maturities until December 2029, and net debt (7) of approximately $966 million. Outlook Geopolitical uncertainty, particularly as it relates to global trade and tariffs, continues to have a significant impact on broader steel industry trends. As we closely monitor developments and assess their potential impact on the commercial environment for graphite electrodes, we continue to expect demand for graphite electrodes in the near term will remain relatively flat in most of the regions in which we operate. In the United States, steel production is expected to increase modestly in 2025 on a full-year basis, with growth expected to be driven by the electric arc furnace method of steelmaking, resulting in higher graphite electrode demand in this key region. For GrafTech, our expectation remains achieving an approximate 10% year-over-year increase in our sales volume for 2025 on a full-year basis, as we continue to regain market share. This reflects our compelling customer value proposition and our ongoing focus on delivering on the needs of our customers. As it relates to price, challenging pricing dynamics have persisted in most regions and the pricing environment remains unsustainably low. As a result, we continue to execute actions to accelerate our path to normalized levels of profitability and support our ability to invest in our business. These include initiatives to optimize our order book and actively shift the geographic mix of our sales volume to regions where there is an opportunity to capture higher average selling prices, particularly in the United States. In addition, as previously announced, we informed our customers in early 2025 of our intention to increase prices by 15% on 2025 volume that was not yet committed as of the date of the announced price increase. As it relates to costs, we now expect a 7-9% year-over-year decline in our cash cost of goods sold per MT for 2025 on a full-year basis, exceeding our previous guidance of a mid-single digit percentage point decline compared to 2024. This change reflects ongoing strong execution of our initiatives to enhance our cost structure. Regarding the impact of tariffs, we believe we are well-positioned to minimize the potential impacts imposed by current trade policies, reflecting our integrated and global production network that provides us manufacturing flexibility along with proactive measures we have taken across our supply chain. In addition, we will continue to closely manage our working capital levels and capital expenditures. For 2025, we continue to expect the net impact of working capital will be favorable to our full year cash flow performance. We also continue to anticipate our full year 2025 capital expenditures will be approximately $40 million. Longer term, we remain confident that the steel industry's efforts to decarbonize will lead to increased adoption of the electric arc furnace method of steelmaking, driving long-term demand growth for graphite electrodes. We also anticipate the demand for petroleum needle coke, the key raw material we use to produce graphite electrodes, to accelerate driven by its utilization in producing synthetic graphite for use in lithium-ion batteries for the growing electric vehicle market. We believe that the near-term actions we are taking, supported by an industry-leading position and our sustainable competitive advantages, including our substantial vertical integration into petroleum needle coke via our Seadrift facility, will optimally position GrafTech to benefit from that long-term growth. Conference Call Information In connection with this earnings release, you are invited to listen to our earnings call being held on July 25, 2025 at 10:00 a.m. (EDT). The webcast and accompanying slide presentation will be available on our investor relations website at: The earnings call dial-in number is +1 (800) 717-1738 toll-free in North America or +1 (289) 514-5100 for overseas calls, conference ID: 18337. Archived replays of the conference call and webcast will be made available on our investor relations website at: GrafTech also makes its complete financial reports that have been filed with the Securities and Exchange Commission ("SEC") and other information available at: The information on our website is not part of this release or any report we file with or furnish to the SEC. About GrafTech GrafTech International Ltd. is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals. The Company has a competitive portfolio of low-cost, ultra-high power graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. We are the only large-scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, our key raw material for graphite electrode manufacturing. This unique position provides us with competitive advantages in product quality and cost. ________________________ (1) Loss per share represents diluted loss per share. Adjusted loss per share represents diluted adjusted loss per share. (2) A non-GAAP financial measure, see below for more information and reconciliations to the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). (3) Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production may vary. (4) Includes graphite electrode facilities in Calais, France; Monterrey, Mexico; and Pamplona, Spain. (5) Capacity utilization reflects production volume as a percentage of production capacity. (6) Gross debt reflects the notional value of our outstanding debt and excludes unamortized debt discount and issuance costs. (7) A non-GAAP financial measure, net debt is calculated as gross debt minus cash and cash equivalents (June 30, 2025 gross debt of $1,125 million less June 30, 2025 cash and cash equivalents of $159 million). Cautionary Note Regarding Forward-Looking Statements This press release and related discussions may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current views with respect to, among other things, financial projections, plans and objectives of management for future operations, future economic performance and short-term and long-term liquidity. Examples of forward-looking statements include, among others, statements we make regarding future estimated volume, pricing and revenue, and anticipated levels of capital expenditures and cost of goods sold. You can identify these forward-looking statements by the use of forward-looking words such as 'will,' 'may,' 'plan,' 'estimate,' 'project,' 'believe,' 'anticipate,' 'expect,' 'foresee,' 'intend,' 'should,' 'would,' 'could,' 'target,' 'goal,' 'continue to,' 'positioned to,' 'are confident,' or the negative versions of those words or other comparable words. Any forward-looking statements contained in this press release are based upon our historical performance and on our current plans, estimates and expectations considering information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will be achieved. Our expectations and targets are not predictions of actual performance and historically our performance has deviated, often significantly, from our expectations and targets. These forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to: our dependence on the global steel industry generally and the electric arc furnace steel industry in particular; the cyclical nature of our business and the selling prices of our products, which may decline in the future, and may lead to prolonged periods of reduced profitability and net losses or adversely impact liquidity; the sensitivity of our business and operating results to economic conditions, including any recession, and the possibility others may not be able to fulfill their obligations to us in a timely fashion or at all; the possibility that we may be unable to implement our business strategies in an effective manner, including our ability to effectively implement price increases and shift sales to regions with higher average selling prices; continued overcapacity of the global graphite electrode industry, which may further adversely affect graphite electrode prices; the competitiveness of the graphite electrode industry; our dependence on the supply of raw materials, including decant oil and petroleum needle coke, and disruptions in supply chains for these materials; our primary reliance on one facility in Monterrey, Mexico for the manufacturing of connecting pins; the cost of electric power and natural gas, particularly in Europe; our manufacturing operations are subject to hazards; the legal, compliance, economic, social and political risks associated with our substantial operations in multiple countries; the possibility that fluctuation of foreign currency exchange rates could materially harm our financial results; the possibility that our results of operations could further deteriorate if our manufacturing operations were substantially disrupted for an extended period, including as a result of equipment failure, climate change, regulatory issues, natural disasters, public health crises, such as a global pandemic, political crises or other catastrophic events; the risks and uncertainties associated with litigation, arbitration, and like disputes, including disputes related to contractual commitments; our dependence on third parties for certain construction, maintenance, engineering, transportation, warehousing and logistics services; the possibility that we are subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, including with respect to our third-party suppliers and business partners; the possibility that we are unable to recruit or retain key management and plant operating personnel or successfully negotiate with the representatives of our employees, including labor unions; the sensitivity of long-lived assets on our balance sheet to changes in the market; our dependence on protecting our intellectual property and the possibility that third parties may claim that our products or processes infringe their intellectual property rights; the impact of inflation and our ability to mitigate the effect on our costs; the impact of macroeconomic and geopolitical events on our business, results of operations, financial condition and cash flows, and the disruptions and inefficiencies in our supply chain that may occur as a result of such events; the possibility that the imposition of current, new or increases of existing custom duties and other tariffs in the countries in which we, our customers and our suppliers operate could adversely affect our operations and results of operations; the possibility that our indebtedness could limit our financial and operating activities or that our cash flows may not be sufficient to service our indebtedness; past increases in benchmark interest rates and the fact that any current or future borrowings may subject us to interest rate risk; risks and uncertainties associated with our ability to access the capital and credit markets could adversely affect our results of operations, cash flows and financial condition; the possibility that disruptions in the capital and credit markets could adversely affect our customers and suppliers; the possibility that restrictive covenants in our financing agreements could restrict or limit our operations; changes in, or more stringent enforcement of, health, safety and environmental regulations applicable to our manufacturing operations and facilities; our ability to continue to meet the New York Stock Exchange listing standards; and our ability to obtain stockholder approval for a reverse stock split with respect to our common stock (the 'Reverse Stock Split'), the implementation of the Reverse Stock Split pending such approval, and the potential effects of the Reverse Stock Split, including, among others, effects on our compliance with NYSE listing requirements, our market capitalization, the trading price, marketability and liquidity of our common stock and certain accounting matters. These factors should not be construed as exhaustive and should be read in conjunction with the Risk Factors and other cautionary statements that are included in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and other filings with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. Except as required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this press release and in our Annual Report on Form 10-K that could cause actual results to differ before making an investment decision to purchase our common stock. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us. Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted net loss, adjusted loss per share, free cash flow, adjusted free cash flow, net debt and cash cost of goods sold per MT are non-GAAP financial measures. We define EBITDA, a non-GAAP financial measure, as net loss plus interest expense, minus interest income, plus income taxes and depreciation and amortization. We define adjusted EBITDA, a non-GAAP financial measure, as EBITDA adjusted by any pension and other post-employment benefit ("OPEB") expenses, rationalization and rationalization-related expenses, non-cash gains or losses from foreign currency remeasurement of non-operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar, stock-based compensation expense, proxy contest expenses and Tax Receivable Agreement adjustments. Adjusted EBITDA is the primary metric used by our management and our Board of Directors to establish budgets and operational goals for managing our business and evaluating our performance. We monitor adjusted EBITDA as a supplement to our GAAP measures, and believe it is useful to present to investors, because we believe that it facilitates evaluation of our period-to-period operating performance by eliminating items that are not operational in nature, allowing comparison of our recurring core business operating results over multiple periods unaffected by differences in capital structure, capital investment cycles and fixed asset base. In addition, we believe adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities. Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; adjusted EBITDA does not reflect our cash expenditures for capital equipment or other contractual commitments, including any capital expenditure requirements to augment or replace our capital assets; adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness; adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; adjusted EBITDA does not reflect expenses relating to our pension and OPEB plans; adjusted EBITDA does not reflect rationalization or rationalization-related expenses; adjusted EBITDA does not reflect the non-cash gains or losses from foreign currency remeasurement of non-operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar; adjusted EBITDA does not reflect stock-based compensation expense; adjusted EBITDA does not reflect proxy contest expenses; adjusted EBITDA does not reflect Tax Receivable Agreement adjustments; and other companies, including companies in our industry, may calculate EBITDA and adjusted EBITDA differently, which reduces its usefulness as a comparative measure. We define adjusted net loss, a non-GAAP financial measure, as net loss, excluding the items used to calculate adjusted EBITDA and further excluding debt modification costs, less the tax effect of those adjustments and non-cash income tax expense related to the establishment of a deferred tax valuation allowance. We define adjusted loss per share, a non-GAAP financial measure, as adjusted net loss divided by the weighted average diluted common shares outstanding during the period. We believe adjusted net loss and adjusted loss per share are useful to present to investors because we believe that they assist investors' understanding of the underlying operational profitability of the Company. We define free cash flow, a non-GAAP financial measure, as net cash provided by or used in operating activities less capital expenditures. We define adjusted free cash flow, a non-GAAP financial measure, as free cash flow adjusted by payments made for debt modification costs. We use free cash flow and adjusted free cash flow as critical measures in the evaluation of liquidity in conjunction with related GAAP amounts. We also use these measures when considering available cash, including for decision-making purposes related to dividends and discretionary investments. Further, these measures help management, the Board of Directors, and investors evaluate the Company's ability to generate liquidity from operating activities. We define net debt, a non-GAAP financial measure, as gross debt minus cash and cash equivalents. We believe this is an important measure as it is more representative of our financial position. We define cash cost of goods sold per MT, a non-GAAP financial measure, as cost of goods sold less depreciation and amortization, less cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes and less rationalization-related expenses, with this total divided by our sales volume measured in MT. We believe this is an important measure as it is used by our management and Board of Directors to evaluate our costs on a per MT basis. In evaluating these non-GAAP financial measures, you should be aware that in the future, we may incur expenses similar to the adjustments in the reconciliations presented below. Our presentations of these non-GAAP financial measures should not be construed as suggesting that our future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating our performance, you should consider these non-GAAP financial measures alongside other measures of financial performance and liquidity, including our net loss, loss per share, cash flow from operating activities, cost of goods sold and other GAAP measures. June 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 158,543 $ 256,248 Accounts and notes receivable, net of allowance for doubtful accounts of $4,286 as of June 30, 2025 and $7,114 as of December 31, 2024 90,757 93,576 Inventories 255,926 231,241 Prepaid expenses and other current assets 61,225 55,732 Total current assets 566,451 636,797 Property, plant and equipment 962,754 910,247 Less: accumulated depreciation 474,400 427,548 Net property, plant and equipment 488,354 482,699 Deferred income taxes 12,010 53,139 Other assets 45,211 51,639 Total assets $ 1,112,026 $ 1,224,274 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 50,367 $ 72,833 Accrued income and other taxes 9,991 9,642 Other accrued liabilities 54,068 55,432 Interest payable — — Tax Receivable Agreement — 2,022 Total current liabilities 114,426 139,929 Long-term debt 1,090,811 1,086,915 Other long-term obligations 48,657 48,559 Deferred income taxes 26,567 23,971 Tax Receivable Agreement long-term — 3,802 Stockholders' deficit: Preferred stock, par value $0.01, 300,000,000 shares authorized, none issued — — Common stock, par value $0.01, 3,000,000,000 shares authorized, 258,151,443 and 257,263,710 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 2,582 2,572 Additional paid-in capital 757,185 755,338 Accumulated other comprehensive loss (8,864 ) (43,359 ) Accumulated deficit (919,338 ) (793,453 ) Total stockholders' deficit (168,435 ) (78,902 ) Total liabilities and stockholders' deficit $ 1,112,026 $ 1,224,274 GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES (Dollars in thousands, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net sales $ 131,840 $ 137,327 $ 243,679 $ 273,911 Cost of goods sold 129,885 131,970 240,650 267,174 Lower of cost or market inventory valuation adjustment 1,893 1,381 4,676 4,073 Gross profit (loss) 62 3,976 (1,647 ) 2,664 Research and development 1,348 1,447 3,227 3,074 Selling and administrative expenses 13,267 5,098 27,889 20,375 Rationalization expenses — 110 — 3,255 Operating loss (14,553 ) (2,679 ) (32,763 ) (24,040 ) Other income, net (2,426 ) (1,091 ) (1,979 ) (1,484 ) Interest expense 25,418 15,609 55,259 31,235 Interest income (1,866 ) (1,853 ) (3,801 ) (3,377 ) Loss before income taxes (35,679 ) (15,344 ) (82,242 ) (50,414 ) Income tax expense (benefit) 51,207 (592 ) 43,995 (4,793 ) Net loss $ (86,886 ) $ (14,752 ) $ (126,237 ) $ (45,621 ) Basic loss per common share: Net loss per share $ (0.34 ) $ (0.06 ) $ (0.49 ) $ (0.18 ) Weighted average common shares outstanding 259,183,478 257,772,069 258,779,643 257,587,613 Diluted loss per common share: Net loss per share $ (0.34 ) $ (0.06 ) $ (0.49 ) $ (0.18 ) Weighted average common shares outstanding 259,183,478 257,772,069 258,779,643 257,587,613 GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cash flow from operating activities: Net loss $ (86,886 ) $ (14,752 ) $ (126,237 ) $ (45,621 ) Adjustments to reconcile net loss to cash used in operations: Depreciation and amortization 15,562 14,319 29,345 28,202 Deferred income tax benefit 49,447 (1,537 ) 42,137 (6,118 ) Non-cash stock-based compensation expense 1,842 1,561 2,422 2,608 Non-cash interest expense 1,948 (1,501 ) 3,896 (2,970 ) Lower of cost or market inventory valuation adjustment 1,893 1,381 4,676 4,073 Other adjustments 6,485 81 9,551 1,203 Net change in working capital* (39,725 ) (36,407 ) (45,388 ) (13,345 ) Change in Tax Receivable Agreement (3,802 ) — (5,824 ) (5,417 ) Net cash used in operating activities (53,236 ) (36,855 ) (85,422 ) (37,385 ) Cash flow from investing activities: Capital expenditures (3,909 ) (6,979 ) (14,190 ) (17,490 ) Proceeds from the sale of fixed assets 4 77 33 80 Net cash used in investing activities (3,905 ) (6,902 ) (14,157 ) (17,410 ) Cash flow from financing activities: Payments for taxes related to net share settlement of equity awards — — (213 ) (82 ) Principal payments under finance lease obligations (27 ) (19 ) (51 ) (35 ) Net cash used in financing activities (27 ) (19 ) (264 ) (117 ) Net change in cash and cash equivalents (57,168 ) (43,776 ) (99,843 ) (54,912 ) Effect of exchange rate changes on cash and cash equivalents 1,428 (688 ) 2,138 (1,240 ) Cash and cash equivalents at beginning of period 214,283 165,190 256,248 176,878 Cash and cash equivalents at end of period $ 158,543 $ 120,726 $ 158,543 $ 120,726 * Net change in working capital due to changes in the following components: Accounts and notes receivable, net $ 1,195 $ (4,133 ) $ 6,591 $ 4,442 Inventories (2,283 ) (4,542 ) (25,654 ) 20,786 Prepaid expenses and other current assets (408 ) (3,596 ) (4,268 ) 717 Income taxes payable 623 (431 ) (243 ) (2,864 ) Accounts payable and accruals (21,920 ) (6,814 ) (21,817 ) (36,412 ) Interest payable (16,932 ) (16,891 ) 3 (14 ) Net change in working capital $ (39,725 ) $ (36,407 ) $ (45,388 ) $ (13,345 ) The following tables reconcile our non-GAAP financial measures to the most directly comparable GAAP measures: Six Months Ended June 30, Q2 2025 Q1 2025 Q2 2024 2025 2024 Diluted loss per common share: Net loss per share $ (0.34 ) $ (0.15 ) $ (0.06 ) $ (0.49 ) $ (0.18 ) Weighted average shares outstanding 259,183,478 258,369,101 257,772,069 258,779,643 257,587,613 Adjustments, pre-tax: Pension and OPEB plan expenses (1) 633 628 477 1,261 824 Rationalization expenses (2) — — 110 — 3,255 Rationalization-related expenses (3) — — — — 2,655 Non-cash losses (gains) on foreign currency remeasurement (4) 1,363 (17 ) (928 ) 1,346 (1,090 ) Stock-based compensation expense (5) 1,842 580 1,561 2,422 2,608 Proxy contest expenses (6) — — 542 — 752 Tax Receivable Agreement adjustment (7) (3,802 ) 11 — (3,791 ) 37 Debt modification costs (8) 932 5,361 — 6,293 — Total non-GAAP adjustments pre-tax 968 6,563 1,762 7,531 9,041 Income tax non-GAAP adjustment (9) (42,624 ) — — (42,624 ) — Income tax impact on non-GAAP adjustments (10) (1,047 ) 1,367 574 320 2,145 Adjusted net loss $ (42,247 ) $ (34,155 ) $ (13,564 ) $ (76,402 ) $ (38,725 ) Reconciliation of Loss Per Share to Adjusted Loss Per Share Six Months Ended J une 30, Q2 2025 Q1 2025 Q2 2024 2025 2024 Loss per share $ (0.34 ) $ (0.15 ) $ (0.06 ) $ (0.49 ) $ (0.18 ) Adjustments per share: Pension and OPEB plan expenses (1) — 0.01 — — — Rationalization expenses (2) — — — — 0.01 Rationalization-related expenses (3) — — — — 0.01 Non-cash losses (gains) on foreign currency remeasurement (4) 0.01 — — 0.01 — Stock-based compensation expense (5) 0.01 — 0.01 0.01 0.01 Proxy contest expenses (6) — — — — — Tax Receivable Agreement adjustment (7) (0.01 ) — — (0.01 ) — Debt modification costs (8) — 0.02 — 0.02 — Total non-GAAP adjustments pre-tax per share 0.01 0.03 0.01 0.03 0.03 Income tax non-GAAP adjustment per share (9) (0.16 ) — — (0.16 ) — Income tax impact on non-GAAP adjustments per share (10) (0.01 ) 0.01 — — — Reconciliation of Net Loss to Adjusted EBITDA Six Months Ended J une 30, Q2 2025 Q1 2025 Q2 2024 2025 2024 Net loss $ (86,886 ) $ (39,351 ) $ (14,752 ) $ (126,237 ) $ (45,621 ) Add: Depreciation and amortization 15,562 13,783 14,319 29,345 28,202 Interest expense 25,418 29,841 15,609 55,259 31,235 Interest income (1,866 ) (1,935 ) (1,853 ) (3,801 ) (3,377 ) Income taxes 51,207 (7,212 ) (592 ) 43,995 (4,793 ) EBITDA 3,435 (4,874 ) 12,731 (1,439 ) 5,646 Adjustments: Pension and OPEB plan expenses (1) 633 628 477 1,261 824 Rationalization expenses (2) — — 110 — 3,255 Rationalization-related expenses (3) — — — — 2,655 Non-cash losses (gains) on foreign currency remeasurement (4) 1,363 (17 ) (928 ) 1,346 (1,090 ) Stock-based compensation expense (5) 1,842 580 1,561 2,422 2,608 Proxy contest expenses (6) — — 542 — 752 Tax Receivable Agreement adjustment (7) (3,802 ) 11 — (3,791 ) 37 Adjusted EBITDA $ 3,471 $ (3,672 ) $ 14,493 $ (201 ) $ 14,687 Six Months Ended J une 30, Q2 2025 Q1 2025 Q2 2024 2025 2024 Cost of goods sold $ 129,885 $ 110,765 $ 131,970 $ 240,650 $ 267,174 Less: Depreciation and amortization (12) 13,946 12,144 12,648 26,090 24,855 Cost of goods sold - by-products and other (13) 8,585 8,415 9,301 17,000 18,901 Rationalization-related expenses (3) — — — — 2,655 Cash cost of goods sold 107,354 90,206 110,021 197,560 220,763 Sales volume (in thousands of MT) 28.6 24.7 25.5 53.3 49.6 Cash cost of goods sold per MT $ 3,754 $ 3,652 $ 4,315 $ 3,707 $ 4,451 (1) Net periodic benefit cost for our pension and OPEB plans. (2) Severance and contract termination costs associated with the cost rationalization and footprint optimization plan announced in February 2024. (3) Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024. (4) Non-cash losses (gains) from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar. (5) Non-cash expense for stock-based compensation awards. (6) Expenses associated with our proxy contest. (7) Prior to the second quarter of 2025, represents expense adjustment for future payment to our sole pre-Initial Public Offering ("IPO") stockholder for tax assets that have been utilized. In the second quarter of 2025, represents the write-off of the remaining liability for pre-IPO tax assets that are not expected to be utilized. (8) Debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Condensed Consolidated Statements of Operations. (9) Represents non-cash income tax expense recorded in the second quarter of 2025 related to the establishment of a full valuation allowance against the Company's United States and Switzerland deferred tax assets. (10) Represents the tax impact on the non-GAAP adjustments. (11) Cash payments of debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Condensed Consolidated Statements of Operations and recognized in net cash used in operating activities on the Condensed Consolidated Statements of Cash Flows. (12) Reflects the portion of depreciation and amortization that is recognized in cost of goods sold.
Business Wire
25-07-2025
- Business
- Business Wire
GrafTech Reports Second Quarter 2025 Results
BROOKLYN HEIGHTS, Ohio--(BUSINESS WIRE)--GrafTech International Ltd. (NYSE: EAF) ("GrafTech," the "Company," "we," or "our") today announced its unaudited financial results for the quarter and six months ended June 30, 2025. Highlights Grew sales volume 12% year-over-year for the second quarter of 2025, resulting in GrafTech's highest sales volume performance since the third quarter of 2022. Continue to expect an approximate 10% year-over-year increase in sales volume for 2025 on a full-year basis, which would result in cumulative sales volume growth of approximately 25% since the end of 2023. Grew sales volume in the United States 38% year-over-year for the second quarter of 2025 and 32% for the first six months of 2025, reflecting our strategy to actively shift the geographic mix of our sales volume towards this key region. Achieved a 13% year-over-year reduction in cash costs per metric ton ("MT") for the second quarter of 2025. We now project a 7-9% year-over-year decline in our cash costs per MT for 2025 on a full-year basis, exceeding our previous guidance range of a mid-single digit percentage point decline. Generated positive EBITDA in the second quarter of 2025, reflecting continued progress on our path to normalized levels of profitability. Ended the second quarter of 2025 with total liquidity of $367 million; this strong liquidity position continues to support our ability to manage through the near-term, industry-wide challenges. Second Quarter 2025 Summary Sales volume of 28.6 thousand MT Net sales of $132 million Net loss of $87 million, or $0.34 per share (1), including a $43 million non-cash income tax expense related to a valuation allowance against certain deferred tax assets Adjusted EBITDA (2) of $3 million Net cash used in operating activities of $53 million Adjusted free cash flow (2) of negative $53 million CEO Comments "We continue to deliver on our key commercial, operational and financial objectives and targets, reflecting strong execution of our strategic initiatives and our absolute focus on managing all areas within our control," said Timothy Flanagan, Chief Executive Officer and President. 'Our ability to drive strong volume growth and expand our market share in key regions, despite a challenging commercial environment, demonstrates the strength of our customer value proposition and our focus on meeting customer needs. At the same time, our team is executing cost savings initiatives that will accelerate our return to normalized profitability as the market recovers." "Longer term, decarbonization efforts will continue to reshape steelmaking in the years ahead," continued Mr. Flanagan. "Specifically, we remain confident that the steel industry's ongoing shift toward electric arc furnace steelmaking will continue, driving long-term demand growth for graphite electrodes. The successful execution of our initiatives to manage the current market dynamics is serving to preserve our ability to remain the electric arc furnace industry's preeminent supplier of high-quality graphite electrode products and technical services. As a result, GrafTech is in a strong position to benefit from long-term favorable trends that will shape the future of our industry and deliver significant growth." Net sales for the second quarter of 2025 were $132 million, a decrease of 4% compared to $137 million for the second quarter of 2024. The decline primarily reflected a year-over-year decrease in our weighted-average realized price, partially offset by higher sales volume. Net loss for the second quarter of 2025 was $87 million, or $0.34 per share, compared to a net loss of $15 million, or $0.06 per share, for the second quarter of 2024. Net loss for the second quarter of 2025 included a $43 million non-cash income tax expense related to the establishment of a full valuation allowance against the Company's United States and Switzerland deferred tax assets. Adjusted EBITDA (2) was $3 million for the second quarter of 2025, compared to $14 million for the second quarter of 2024. The decline primarily reflected lower weighted-average realized prices, partially offset by a 13% reduction in cash costs on a per MT basis for the second quarter of 2025, compared to the same period in 2024, which reflects our ongoing initiatives to reduce our cost structure as well as the year-over-year improvement in our sales and production volume levels. Adjusted EBITDA (2) for the second quarter of 2024 included a $9 million benefit related to the reimbursement of legal fees and other related expenses in connection with the favorable outcome of an arbitration, which was recorded as a reduction in selling and administrative expenses. For the second quarter of 2025, net cash used in operating activities was $53 million and adjusted free cash flow (2) was negative $53 million, compared to net cash used in operating activities of $37 million and adjusted free cash flow (2) of negative $44 million for the second quarter of 2024. For the second quarter of 2025, cash paid for interest was $39 million, including $34 million of semi-annual interest payments on the Company's notes. Sales volume for the second quarter of 2025 was 28.6 thousand MT, an increase of 12% compared to the second quarter of 2024. For the second quarter of 2025, our weighted-average realized price was approximately $4,200 per MT. This represented a 12% decrease compared to the second quarter of 2024 but a sequential increase of 2% compared to the first quarter of 2025. The year-over-year decline reflected the substantial completion in 2024 of long-term sales agreements entered into in prior years, as well as persistent competitive pressures across all of our principal commercial regions. These impacts were partially mitigated by our initiative to actively shift more sales volume to the United States, which remains the strongest region for graphite electrode pricing. Production volume was 29.4 thousand MT for the second quarter of 2025, an increase of 10% compared to the second quarter of 2024. On a full-year basis, our expectation remains to balance our production and sales volume levels. Capital Structure and Liquidity As of June 30, 2025, we had total liquidity of $367 million, consisting of cash and cash equivalents of $159 million, $108 million of availability under our revolving credit facility and $100 million of availability under our senior secured first lien delayed draw term loans. Our strong liquidity position continues to support our ability to manage through the near-term, industry-wide challenges. As of June 30, 2025, we had gross debt (6) of $1,125 million, with substantially no maturities until December 2029, and net debt (7) of approximately $966 million. Outlook Geopolitical uncertainty, particularly as it relates to global trade and tariffs, continues to have a significant impact on broader steel industry trends. As we closely monitor developments and assess their potential impact on the commercial environment for graphite electrodes, we continue to expect demand for graphite electrodes in the near term will remain relatively flat in most of the regions in which we operate. In the United States, steel production is expected to increase modestly in 2025 on a full-year basis, with growth expected to be driven by the electric arc furnace method of steelmaking, resulting in higher graphite electrode demand in this key region. For GrafTech, our expectation remains achieving an approximate 10% year-over-year increase in our sales volume for 2025 on a full-year basis, as we continue to regain market share. This reflects our compelling customer value proposition and our ongoing focus on delivering on the needs of our customers. As it relates to price, challenging pricing dynamics have persisted in most regions and the pricing environment remains unsustainably low. As a result, we continue to execute actions to accelerate our path to normalized levels of profitability and support our ability to invest in our business. These include initiatives to optimize our order book and actively shift the geographic mix of our sales volume to regions where there is an opportunity to capture higher average selling prices, particularly in the United States. In addition, as previously announced, we informed our customers in early 2025 of our intention to increase prices by 15% on 2025 volume that was not yet committed as of the date of the announced price increase. As it relates to costs, we now expect a 7-9% year-over-year decline in our cash cost of goods sold per MT for 2025 on a full-year basis, exceeding our previous guidance of a mid-single digit percentage point decline compared to 2024. This change reflects ongoing strong execution of our initiatives to enhance our cost structure. Regarding the impact of tariffs, we believe we are well-positioned to minimize the potential impacts imposed by current trade policies, reflecting our integrated and global production network that provides us manufacturing flexibility along with proactive measures we have taken across our supply chain. In addition, we will continue to closely manage our working capital levels and capital expenditures. For 2025, we continue to expect the net impact of working capital will be favorable to our full year cash flow performance. We also continue to anticipate our full year 2025 capital expenditures will be approximately $40 million. Longer term, we remain confident that the steel industry's efforts to decarbonize will lead to increased adoption of the electric arc furnace method of steelmaking, driving long-term demand growth for graphite electrodes. We also anticipate the demand for petroleum needle coke, the key raw material we use to produce graphite electrodes, to accelerate driven by its utilization in producing synthetic graphite for use in lithium-ion batteries for the growing electric vehicle market. We believe that the near-term actions we are taking, supported by an industry-leading position and our sustainable competitive advantages, including our substantial vertical integration into petroleum needle coke via our Seadrift facility, will optimally position GrafTech to benefit from that long-term growth. Conference Call Information In connection with this earnings release, you are invited to listen to our earnings call being held on July 25, 2025 at 10:00 a.m. (EDT). The webcast and accompanying slide presentation will be available on our investor relations website at: The earnings call dial-in number is +1 (800) 717-1738 toll-free in North America or +1 (289) 514-5100 for overseas calls, conference ID: 18337. Archived replays of the conference call and webcast will be made available on our investor relations website at: GrafTech also makes its complete financial reports that have been filed with the Securities and Exchange Commission ("SEC") and other information available at: The information on our website is not part of this release or any report we file with or furnish to the SEC. About GrafTech GrafTech International Ltd. is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals. The Company has a competitive portfolio of low-cost, ultra-high power graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. We are the only large-scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, our key raw material for graphite electrode manufacturing. This unique position provides us with competitive advantages in product quality and cost. Cautionary Note Regarding Forward-Looking Statements This press release and related discussions may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current views with respect to, among other things, financial projections, plans and objectives of management for future operations, future economic performance and short-term and long-term liquidity. Examples of forward-looking statements include, among others, statements we make regarding future estimated volume, pricing and revenue, and anticipated levels of capital expenditures and cost of goods sold. You can identify these forward-looking statements by the use of forward-looking words such as 'will,' 'may,' 'plan,' 'estimate,' 'project,' 'believe,' 'anticipate,' 'expect,' 'foresee,' 'intend,' 'should,' 'would,' 'could,' 'target,' 'goal,' 'continue to,' 'positioned to,' 'are confident,' or the negative versions of those words or other comparable words. Any forward-looking statements contained in this press release are based upon our historical performance and on our current plans, estimates and expectations considering information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will be achieved. Our expectations and targets are not predictions of actual performance and historically our performance has deviated, often significantly, from our expectations and targets. These forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to: our dependence on the global steel industry generally and the electric arc furnace steel industry in particular; the cyclical nature of our business and the selling prices of our products, which may decline in the future, and may lead to prolonged periods of reduced profitability and net losses or adversely impact liquidity; the sensitivity of our business and operating results to economic conditions, including any recession, and the possibility others may not be able to fulfill their obligations to us in a timely fashion or at all; the possibility that we may be unable to implement our business strategies in an effective manner, including our ability to effectively implement price increases and shift sales to regions with higher average selling prices; continued overcapacity of the global graphite electrode industry, which may further adversely affect graphite electrode prices; the competitiveness of the graphite electrode industry; our dependence on the supply of raw materials, including decant oil and petroleum needle coke, and disruptions in supply chains for these materials; our primary reliance on one facility in Monterrey, Mexico for the manufacturing of connecting pins; the cost of electric power and natural gas, particularly in Europe; our manufacturing operations are subject to hazards; the legal, compliance, economic, social and political risks associated with our substantial operations in multiple countries; the possibility that fluctuation of foreign currency exchange rates could materially harm our financial results; the possibility that our results of operations could further deteriorate if our manufacturing operations were substantially disrupted for an extended period, including as a result of equipment failure, climate change, regulatory issues, natural disasters, public health crises, such as a global pandemic, political crises or other catastrophic events; the risks and uncertainties associated with litigation, arbitration, and like disputes, including disputes related to contractual commitments; our dependence on third parties for certain construction, maintenance, engineering, transportation, warehousing and logistics services; the possibility that we are subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, including with respect to our third-party suppliers and business partners; the possibility that we are unable to recruit or retain key management and plant operating personnel or successfully negotiate with the representatives of our employees, including labor unions; the sensitivity of long-lived assets on our balance sheet to changes in the market; our dependence on protecting our intellectual property and the possibility that third parties may claim that our products or processes infringe their intellectual property rights; the impact of inflation and our ability to mitigate the effect on our costs; the impact of macroeconomic and geopolitical events on our business, results of operations, financial condition and cash flows, and the disruptions and inefficiencies in our supply chain that may occur as a result of such events; the possibility that the imposition of current, new or increases of existing custom duties and other tariffs in the countries in which we, our customers and our suppliers operate could adversely affect our operations and results of operations; the possibility that our indebtedness could limit our financial and operating activities or that our cash flows may not be sufficient to service our indebtedness; past increases in benchmark interest rates and the fact that any current or future borrowings may subject us to interest rate risk; risks and uncertainties associated with our ability to access the capital and credit markets could adversely affect our results of operations, cash flows and financial condition; the possibility that disruptions in the capital and credit markets could adversely affect our customers and suppliers; the possibility that restrictive covenants in our financing agreements could restrict or limit our operations; changes in, or more stringent enforcement of, health, safety and environmental regulations applicable to our manufacturing operations and facilities; our ability to continue to meet the New York Stock Exchange listing standards; and our ability to obtain stockholder approval for a reverse stock split with respect to our common stock (the 'Reverse Stock Split'), the implementation of the Reverse Stock Split pending such approval, and the potential effects of the Reverse Stock Split, including, among others, effects on our compliance with NYSE listing requirements, our market capitalization, the trading price, marketability and liquidity of our common stock and certain accounting matters. These factors should not be construed as exhaustive and should be read in conjunction with the Risk Factors and other cautionary statements that are included in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and other filings with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. Except as required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this press release and in our Annual Report on Form 10-K that could cause actual results to differ before making an investment decision to purchase our common stock. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us. Non-GAAP Financial Measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted net loss, adjusted loss per share, free cash flow, adjusted free cash flow, net debt and cash cost of goods sold per MT are non-GAAP financial measures. We define EBITDA, a non-GAAP financial measure, as net loss plus interest expense, minus interest income, plus income taxes and depreciation and amortization. We define adjusted EBITDA, a non-GAAP financial measure, as EBITDA adjusted by any pension and other post-employment benefit ("OPEB") expenses, rationalization and rationalization-related expenses, non-cash gains or losses from foreign currency remeasurement of non-operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar, stock-based compensation expense, proxy contest expenses and Tax Receivable Agreement adjustments. Adjusted EBITDA is the primary metric used by our management and our Board of Directors to establish budgets and operational goals for managing our business and evaluating our performance. We monitor adjusted EBITDA as a supplement to our GAAP measures, and believe it is useful to present to investors, because we believe that it facilitates evaluation of our period-to-period operating performance by eliminating items that are not operational in nature, allowing comparison of our recurring core business operating results over multiple periods unaffected by differences in capital structure, capital investment cycles and fixed asset base. In addition, we believe adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities. Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; adjusted EBITDA does not reflect our cash expenditures for capital equipment or other contractual commitments, including any capital expenditure requirements to augment or replace our capital assets; adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness; adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; adjusted EBITDA does not reflect expenses relating to our pension and OPEB plans; adjusted EBITDA does not reflect rationalization or rationalization-related expenses; adjusted EBITDA does not reflect the non-cash gains or losses from foreign currency remeasurement of non-operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar; adjusted EBITDA does not reflect stock-based compensation expense; adjusted EBITDA does not reflect proxy contest expenses; adjusted EBITDA does not reflect Tax Receivable Agreement adjustments; and other companies, including companies in our industry, may calculate EBITDA and adjusted EBITDA differently, which reduces its usefulness as a comparative measure. We define adjusted net loss, a non-GAAP financial measure, as net loss, excluding the items used to calculate adjusted EBITDA and further excluding debt modification costs, less the tax effect of those adjustments and non-cash income tax expense related to the establishment of a deferred tax valuation allowance. We define adjusted loss per share, a non-GAAP financial measure, as adjusted net loss divided by the weighted average diluted common shares outstanding during the period. We believe adjusted net loss and adjusted loss per share are useful to present to investors because we believe that they assist investors' understanding of the underlying operational profitability of the Company. We define free cash flow, a non-GAAP financial measure, as net cash provided by or used in operating activities less capital expenditures. We define adjusted free cash flow, a non-GAAP financial measure, as free cash flow adjusted by payments made for debt modification costs. We use free cash flow and adjusted free cash flow as critical measures in the evaluation of liquidity in conjunction with related GAAP amounts. We also use these measures when considering available cash, including for decision-making purposes related to dividends and discretionary investments. Further, these measures help management, the Board of Directors, and investors evaluate the Company's ability to generate liquidity from operating activities. We define net debt, a non-GAAP financial measure, as gross debt minus cash and cash equivalents. We believe this is an important measure as it is more representative of our financial position. We define cash cost of goods sold per MT, a non-GAAP financial measure, as cost of goods sold less depreciation and amortization, less cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes and less rationalization-related expenses, with this total divided by our sales volume measured in MT. We believe this is an important measure as it is used by our management and Board of Directors to evaluate our costs on a per MT basis. In evaluating these non-GAAP financial measures, you should be aware that in the future, we may incur expenses similar to the adjustments in the reconciliations presented below. Our presentations of these non-GAAP financial measures should not be construed as suggesting that our future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating our performance, you should consider these non-GAAP financial measures alongside other measures of financial performance and liquidity, including our net loss, loss per share, cash flow from operating activities, cost of goods sold and other GAAP measures. GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net sales $ 131,840 $ 137,327 $ 243,679 $ 273,911 Cost of goods sold 129,885 131,970 240,650 267,174 Lower of cost or market inventory valuation adjustment 1,893 1,381 4,676 4,073 Gross profit (loss) 62 3,976 (1,647 ) 2,664 Research and development 1,348 1,447 3,227 3,074 Selling and administrative expenses 13,267 5,098 27,889 20,375 Rationalization expenses — 110 — 3,255 Operating loss (14,553 ) (2,679 ) (32,763 ) (24,040 ) Other income, net (2,426 ) (1,091 ) (1,979 ) (1,484 ) Interest expense 25,418 15,609 55,259 31,235 Interest income (1,866 ) (1,853 ) (3,801 ) (3,377 ) Loss before income taxes (35,679 ) (15,344 ) (82,242 ) (50,414 ) Income tax expense (benefit) 51,207 (592 ) 43,995 (4,793 ) Net loss $ (86,886 ) $ (14,752 ) $ (126,237 ) $ (45,621 ) Basic loss per common share: Net loss per share $ (0.34 ) $ (0.06 ) $ (0.49 ) $ (0.18 ) Weighted average common shares outstanding 259,183,478 257,772,069 258,779,643 257,587,613 Diluted loss per common share: Net loss per share $ (0.34 ) $ (0.06 ) $ (0.49 ) $ (0.18 ) Weighted average common shares outstanding 259,183,478 257,772,069 258,779,643 257,587,613 Expand GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cash flow from operating activities: Net loss $ (86,886 ) $ (14,752 ) $ (126,237 ) $ (45,621 ) Adjustments to reconcile net loss to cash used in operations: Depreciation and amortization 15,562 14,319 29,345 28,202 Deferred income tax benefit 49,447 (1,537 ) 42,137 (6,118 ) Non-cash stock-based compensation expense 1,842 1,561 2,422 2,608 Non-cash interest expense 1,948 (1,501 ) 3,896 (2,970 ) Lower of cost or market inventory valuation adjustment 1,893 1,381 4,676 4,073 Other adjustments 6,485 81 9,551 1,203 Net change in working capital* (39,725 ) (36,407 ) (45,388 ) (13,345 ) Change in Tax Receivable Agreement (3,802 ) — (5,824 ) (5,417 ) Net cash used in operating activities (53,236 ) (36,855 ) (85,422 ) (37,385 ) Cash flow from investing activities: Capital expenditures (3,909 ) (6,979 ) (14,190 ) (17,490 ) Proceeds from the sale of fixed assets 4 77 33 80 Net cash used in investing activities (3,905 ) (6,902 ) (14,157 ) (17,410 ) Cash flow from financing activities: Payments for taxes related to net share settlement of equity awards — — (213 ) (82 ) Principal payments under finance lease obligations (27 ) (19 ) (51 ) (35 ) Net cash used in financing activities (27 ) (19 ) (264 ) (117 ) Net change in cash and cash equivalents (57,168 ) (43,776 ) (99,843 ) (54,912 ) Effect of exchange rate changes on cash and cash equivalents 1,428 (688 ) 2,138 (1,240 ) Cash and cash equivalents at beginning of period 214,283 165,190 256,248 176,878 Cash and cash equivalents at end of period $ 158,543 $ 120,726 $ 158,543 $ 120,726 * Net change in working capital due to changes in the following components: Accounts and notes receivable, net $ 1,195 $ (4,133 ) $ 6,591 $ 4,442 Inventories (2,283 ) (4,542 ) (25,654 ) 20,786 Prepaid expenses and other current assets (408 ) (3,596 ) (4,268 ) 717 Income taxes payable 623 (431 ) (243 ) (2,864 ) Accounts payable and accruals (21,920 ) (6,814 ) (21,817 ) (36,412 ) Interest payable (16,932 ) (16,891 ) 3 (14 ) Net change in working capital $ (39,725 ) $ (36,407 ) $ (45,388 ) $ (13,345 ) Expand NON-GAAP RECONCILIATIONS (Dollars in thousands, except per share and per MT data) (Unaudited) Six Months Ended June 30, Q2 2025 Q1 2025 Q2 2024 2025 2024 Net loss $ (86,886 ) $ (39,351 ) $ (14,752 ) $ (126,237 ) $ (45,621 ) Diluted loss per common share: Net loss per share $ (0.34 ) $ (0.15 ) $ (0.06 ) $ (0.49 ) $ (0.18 ) Weighted average shares outstanding 259,183,478 258,369,101 257,772,069 258,779,643 257,587,613 Adjustments, pre-tax: Pension and OPEB plan expenses (1) 633 628 477 1,261 824 Rationalization expenses (2) — — 110 — 3,255 Rationalization-related expenses (3) — — — — 2,655 Non-cash losses (gains) on foreign currency remeasurement (4) 1,363 (17 ) (928 ) 1,346 (1,090 ) Stock-based compensation expense (5) 1,842 580 1,561 2,422 2,608 Proxy contest expenses (6) — — 542 — 752 Tax Receivable Agreement adjustment (7) (3,802 ) 11 — (3,791 ) 37 Debt modification costs (8) 932 5,361 — 6,293 — Total non-GAAP adjustments pre-tax 968 6,563 1,762 7,531 9,041 Income tax non-GAAP adjustment (9) (42,624 ) — — (42,624 ) — Income tax impact on non-GAAP adjustments (10) (1,047 ) 1,367 574 320 2,145 Adjusted net loss $ (42,247 ) $ (34,155 ) $ (13,564 ) $ (76,402 ) $ (38,725 ) Expand Six Months Ended J une 30, Adjustments per share: Pension and OPEB plan expenses (1) — 0.01 — — — Rationalization expenses (2) — — — — 0.01 Rationalization-related expenses (3) — — — — 0.01 Non-cash losses (gains) on foreign currency remeasurement (4) 0.01 — — 0.01 — Stock-based compensation expense (5) 0.01 — 0.01 0.01 0.01 Proxy contest expenses (6) — — — — — Tax Receivable Agreement adjustment (7) (0.01 ) — — (0.01 ) — Debt modification costs (8) — 0.02 — 0.02 — Total non-GAAP adjustments pre-tax per share 0.01 0.03 0.01 0.03 0.03 Income tax non-GAAP adjustment per share (9) (0.16 ) — — (0.16 ) — Income tax impact on non-GAAP adjustments per share (10) (0.01 ) 0.01 — — — Adjusted loss per share $ (0.16 ) $ (0.13 ) $ (0.05 ) $ (0.30 ) $ (0.15 ) Expand Reconciliation of Net Loss to Adjusted EBITDA Six Months Ended J une 30, Q2 2025 Q1 2025 Q2 2024 2025 2024 Net loss $ (86,886 ) $ (39,351 ) $ (14,752 ) $ (126,237 ) $ (45,621 ) Add: Depreciation and amortization 15,562 13,783 14,319 29,345 28,202 Interest expense 25,418 29,841 15,609 55,259 31,235 Interest income (1,866 ) (1,935 ) (1,853 ) (3,801 ) (3,377 ) Income taxes 51,207 (7,212 ) (592 ) 43,995 (4,793 ) EBITDA 3,435 (4,874 ) 12,731 (1,439 ) 5,646 Adjustments: Pension and OPEB plan expenses (1) 633 628 477 1,261 824 Rationalization expenses (2) — — 110 — 3,255 Rationalization-related expenses (3) — — — — 2,655 Non-cash losses (gains) on foreign currency remeasurement (4) 1,363 (17 ) (928 ) 1,346 (1,090 ) Stock-based compensation expense (5) 1,842 580 1,561 2,422 2,608 Proxy contest expenses (6) — — 542 — 752 Tax Receivable Agreement adjustment (7) (3,802 ) 11 — (3,791 ) 37 Adjusted EBITDA $ 3,471 $ (3,672 ) $ 14,493 $ (201 ) $ 14,687 Expand Six Months Ended J une 30, Q2 2025 Q1 2025 Q2 2024 2025 2024 Cost of goods sold $ 129,885 $ 110,765 $ 131,970 $ 240,650 $ 267,174 Less: Depreciation and amortization (12) 13,946 12,144 12,648 26,090 24,855 Cost of goods sold - by-products and other (13) 8,585 8,415 9,301 17,000 18,901 Rationalization-related expenses (3) — — — — 2,655 Cash cost of goods sold 107,354 90,206 110,021 197,560 220,763 Sales volume (in thousands of MT) 28.6 24.7 25.5 53.3 49.6 Cash cost of goods sold per MT $ 3,754 $ 3,652 $ 4,315 $ 3,707 $ 4,451 Expand (1) Net periodic benefit cost for our pension and OPEB plans. (2) Severance and contract termination costs associated with the cost rationalization and footprint optimization plan announced in February 2024. (3) Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024. (4) Non-cash losses (gains) from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar. (5) Non-cash expense for stock-based compensation awards. (6) Expenses associated with our proxy contest. (7) Prior to the second quarter of 2025, represents expense adjustment for future payment to our sole pre-Initial Public Offering ("IPO") stockholder for tax assets that have been utilized. In the second quarter of 2025, represents the write-off of the remaining liability for pre-IPO tax assets that are not expected to be utilized. (8) Debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Condensed Consolidated Statements of Operations. (9) Represents non-cash income tax expense recorded in the second quarter of 2025 related to the establishment of a full valuation allowance against the Company's United States and Switzerland deferred tax assets. (10) Represents the tax impact on the non-GAAP adjustments. (11) Cash payments of debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Condensed Consolidated Statements of Operations and recognized in net cash used in operating activities on the Condensed Consolidated Statements of Cash Flows. (12) Reflects the portion of depreciation and amortization that is recognized in cost of goods sold. (13) Primarily reflects cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes. Expand
Business Wire
30-06-2025
- Business
- Business Wire
GrafTech Announces Publication of 2024 Sustainability Report
BROOKLYN HEIGHTS, Ohio--(BUSINESS WIRE)--GrafTech International Ltd. (NYSE:EAF) (the 'Company' or 'GrafTech'), a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace steel, today announced the publication of its 2024 Sustainability Report, highlighting the Company's sustainability efforts and initiatives. 'We are pleased to present GrafTech's 2024 Sustainability Report, demonstrating our continued commitment to advancing our sustainability and governance initiatives, which remain central to our overall business strategy,' commented Timothy Flanagan, Chief Executive Officer and President. 'As a leading graphite electrode provider, we are proud of the vital role GrafTech plays in the global transition to a more sustainable future of steel manufacturing.' GrafTech's digital 2024 Sustainability Report is available on our website at and we welcome feedback at sustainability@ About GrafTech GrafTech International Ltd. is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals. The Company has a competitive portfolio of low-cost, ultra-high power graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. We are the only large-scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, our key raw material for graphite electrode manufacturing. This unique position provides us with competitive advantages in product quality and cost. Cautionary Note Regarding Forward-Looking Statements This press release may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current views with respect to, among other things, financial projections, plans, and objectives of management for future operations, future economic performance, and short-term and long-term liquidity. Examples of forward-looking statements include, among others, statements we make regarding future estimated volume, pricing and revenue, and anticipated levels of capital expenditures and cost of good sold. You can identify these forward-looking statements by the use of forward-looking words such as 'will,' 'may,' 'plan,' 'estimate,' 'project,' 'believe,' 'anticipate,' 'expect,' 'foresee,' 'intend,' 'should,' 'would,' 'could,' 'target,' 'goal,' 'continue to,' 'positioned to,' 'are confident,' or the negative versions of those words or other comparable words. Any forward-looking statements contained in this press release are based upon our historical performance and on our current plans, estimates and expectations considering information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will be achieved. Our expectations and targets are not predictions of actual performance and historically our performance has deviated, often significantly, from our expectations and targets. These forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy, and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements, including those factors described in the 'Cautionary Note Regarding Forward-Looking Statements' and 'Risk Factors' sections in reports and statements filed by the Company with the United States Securities and Exchange Commission. The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. Except as required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise.
Yahoo
26-04-2025
- Business
- Yahoo
GrafTech International Ltd (EAF) Q1 2025 Earnings Call Highlights: Navigating Challenges with ...
Sales Volume Growth: Increased by 2% year-over-year in Q1 2025. US Sales Volume: Grew by nearly 25% year-over-year in Q1 2025. Average Selling Price: $4,100 per metric ton, a 20% year-over-year decline. Production Volume: 28,000 tons with a capacity utilization rate of 63%. Net Loss: $39 million or $0.15 per share for Q1 2025. Adjusted EBITDA: Negative $4 million in Q1 2025. Cash COGS per Metric Ton: Approximately $3,650 for Q1 2025. Cash Used in Operating Activities: $32 million for Q1 2025. Adjusted Free Cash Flow: Negative $40 million for Q1 2025. Total Liquidity: $421 million at the end of Q1 2025. Warning! GuruFocus has detected 3 Warning Signs with EAF. Release Date: April 25, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. GrafTech International Ltd (NYSE:EAF) reported a 2% year-over-year increase in sales volume for the first quarter, with expectations to achieve low-double-digit percentage growth for the full year 2025. The company successfully increased its sales volume in the United States by nearly 25% year-over-year, capitalizing on the higher pricing region. GrafTech has implemented significant cost reduction measures, achieving a 23% year-over-year reduction in cash COGS per metric ton in 2024 and is on track for further reductions in 2025. The company is strategically shifting its geographical sales mix to regions with higher selling prices, such as the US and Western Europe, to optimize profitability. GrafTech's integrated and global production network provides flexibility to mitigate potential impacts from tariffs and trade policy changes, with less than a 1% impact on full-year cash COGS per metric ton expected from tariffs. GrafTech International Ltd (NYSE:EAF) reported a net loss of $39 million for the first quarter, with adjusted EBITDA being negative $4 million, reflecting lower average selling prices. The average selling price for graphite electrodes declined by 20% year-over-year, largely due to the completion of higher-priced long-term agreements and ongoing pricing challenges. The global steel production environment remains challenging, with weak demand and excess capacity leading to unsustainable pricing dynamics for graphite electrodes. The company's capacity utilization rate was 63% in the first quarter, indicating underutilization of production capacity. GrafTech faces ongoing uncertainty related to global trade policies and tariffs, which could impact its operations and market dynamics. Q: With Indian material now facing at least 10% tariffs, has that changed the pace of declines in the US market pricing? A: Historically, there hasn't been trade protection for the US market from Indian imports. However, with the new tariffs, the availability of Indian material in the US market will likely decrease due to increased costs and freight disadvantages. This presents an opportunity for GrafTech to capitalize on its proximity and service to US customers. - Timothy Flanagan, CEO Q: How much of your sales are now coming from the US and Western Europe? A: Combined, sales from the US and Western Europe now account for well over 50% of our volume and revenue. - Timothy Flanagan, CEO Q: Can you provide an update on the progress of your share recovery and expectations for the next year? A: We expect low-double-digit growth in volume year-over-year. We've grown sales volume in North America and Europe, our two most strategic markets. We anticipate being more heavily weighted towards the Americas, with over 50% of sales, while Europe and the Middle East will hold steady. - Timothy Flanagan, CEO Q: What is your outlook on steel utilization rates over the next 6 to 12 months? A: While there's uncertainty in global industrial production, we feel confident in our customer demand and have reiterated our sales volume guidance. We see potential opportunities from increased demand or market displacement. - Timothy Flanagan, CEO Q: How do you view the pricing outlook for graphite electrodes and needle coke? A: Needle coke pricing has been stable for 12-18 months, and any demand increase or market disruption could improve pricing. Graphite electrode pricing declined in 2024 but has stabilized from Q4 to Q1. We are optimistic about driving pricing in the second half of the year. - Timothy Flanagan, CEO For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
