Notice of Fraudulent Job Offers

GrafTech is aware of fraudulent offers of employment made by people who claim to be employees of GrafTech’s Human Resources department, but who are not affiliated with GrafTech. This kind of fraud is normally done through unsolicited e-mails, online third-party employment websites, and instant messenger programs. These individuals will often request recipients to provide personal information, send checks to the recipient with the request that the checks be deposited into the recipient’s personal bank account, and request that the recipient purchase training materials and office equipment as part of the fake recruiting process. GrafTech takes recruitment fraud very seriously, and by making you aware of this, we hope to prevent victims from falling for these scams. GrafTech does not accept responsibility for this recruitment fraud and recommends that all job-seekers educate themselves on these fraudulent practices so that they do not become a victim.

Learn More

How to Protect Yourself from Fraudulent Job Offers

  • Positions posted on https://career4.successfactors.com/career?company=GTI are legitimate.
  • Do not respond to unsolicited offers of employment from people with whom you are unfamiliar with.
  • GrafTech will never pre-wire money to an applicant or request financial information from an applicant.
  • GrafTech will never request that an applicant purchase training materials or office equipment as part of our recruiting process.
  • GrafTech does not use instant messaging programs to interview candidates for a job or extend a job offer.
  • If you are concerned about the legitimacy of a message received from GrafTech, please do not hesitate to call GrafTech at 216.676.2000, select HR and provide details about the message. Your call will be returned.
  • Do not communicate further with an individual if you suspect the communications may be fraudulent and consider contacting your local law enforcement.

News Details

View all news

GrafTech Reports Third Quarter 2020 Results

Nov 3, 2020

BROOKLYN HEIGHTS, Ohio--(BUSINESS WIRE)-- GrafTech International Ltd. (NYSE: EAF) (GrafTech or the Company) today announced financial results for the quarter ended September 30, 2020, including net income of $94 million, or $0.35 per share, and Adjusted EBITDA(1) of $153 million.

"We are pleased with GrafTech's third quarter financial results while operating in a challenging environment and appreciate the ongoing commitment of our team through the COVID-19 pandemic," said David Rintoul, President and Chief Executive Officer. "We continue to work closely with our customers and are committed to helping them navigate the current market conditions."

Third Quarter Results and Key Financial Measures

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

(dollars in thousands, except per share amounts)

2020

2019

 

2020

2019

 

 

 

 

 

 

Net sales

$

286,987

 

$

420,797

 

 

$

886,351

 

$

1,376,181

 

Net income

$

94,234

 

$

175,876

 

 

$

309,278

 

$

569,680

 

Earnings per share (2)

$

0.35

 

$

0.61

 

 

$

1.15

 

$

1.96

 

Adjusted EBITDA(1)

$

153,105

 

$

245,454

 

 

$

483,408

 

$

813,673

 

(1)

A non-GAAP financial measure, see below for more information and a reconciliation of EBITDA and Adjusted EBITDA to Net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

(2)

Earnings per share represents diluted earnings per share.

Net sales for the quarter ended September 30, 2020 were $287 million, compared to $421 million in the third quarter of 2019. Lower net sales reflect reduced sales volumes driven primarily by the impact of COVID-19 on steel production levels and continued customer inventory destocking.

Net income for the third quarter of 2020 was $94 million, or $0.35 per share, compared to $176 million, or $0.61 per share in the third quarter of 2019. Adjusted EBITDA was $153 million in the third quarter of 2020 compared to $245 million in the third quarter of 2019.

Cash flow from operating activities was $129 million in the third quarter of 2020, compared to $226 million in the third quarter 2019. We ended the quarter with a strong liquidity position of approximately $406 million, consisting of cash and cash equivalents of $159 million and availability of $247 million under our revolving credit facility.

Key operating metrics

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

(in thousands)

 

2020

2019

 

2020

2019

Sales volume (MT) (1)

33

 

40

 

 

98

 

130

 

Production volume (MT) (2)

32

 

40

 

 

98

 

136

 

Production capacity excluding St. Marys (MT) (3)(4)

48

 

48

 

 

150

 

150

 

Capacity utilization excluding St. Marys (3)(5)

67

%

83

%

 

65

%

91

%

Total production capacity (MT) (4)(6)

55

 

55

 

 

171

 

171

 

Total capacity utilization (5)(6)

58

%

73

%

 

57

%

80

%

(1)

Sales volume reflects only graphite electrodes manufactured by GrafTech.

(2)

Production volume reflects graphite electrodes we produced during the period.

(3)

In the first quarter of 2018, our St. Marys facility began graphitizing a limited number of electrodes sourced from our Monterrey, Mexico facility.

(4)

Production capacity reflects expected maximum production volume during the period under normal operating conditions, standard product mix and expected maintenance outage. Actual production may vary.

(5)

Capacity utilization reflects production volume as a percentage of production capacity.

(6)

Includes graphite electrode facilities in Calais, France; Monterrey, Mexico; Pamplona, Spain and St. Marys, Pennsylvania.

Sales volume was 33 thousand metric tons (MT) in the third quarter of 2020 and consisted of 27 thousand MT shipped under our long-term agreements (LTAs) and 6 thousand MT of spot sales. Production volume, aligned with sales volume, was 32 thousand MT in the third quarter of 2020 compared to 40 thousand MT in the same period of 2019.

COVID-19 and Operational Update

GrafTech continues to proactively manage through the COVID-19 crisis. Our executive-led COVID-19 response team meets three times per week to monitor the ongoing situation and respond as needed.

Our plants have remained operational through the current pandemic and maintained a 98% on-time delivery rate. Our global footprint gives us the flexibility to move or adjust production if needed.

We continue to focus on containing our costs and aligning production to current sales levels for the remainder of the year. We expect to meet our reduced full year capital expenditure estimate of approximately $35 million.

Commercial Update

GrafTech services customers at over 300 locations across the globe all of which have been impacted by COVID-19. We are seeing a measured recovery in the global steel markets compared to the second quarter 2020, with each region recovering at different rates, and anticipate this will have a positive influence on graphite electrode demand. In the third quarter 2020, the global (ex-China) steel market capacity utilization rate improved to over 60%1. In the U.S., the third quarter capacity utilization rate was approximately 64%2. By late October, the capacity utilization rate in the U.S. steel market approached 70%2.

The commercial team has worked diligently to achieve solid results in the current environment. Year-to-date sales volumes through the third quarter were 98 thousand MT, consisting of LTA volumes of 82 thousand MT and non-LTA volumes of 16 thousand MT.

During the third quarter, our average price from LTAs declined slightly to approximately $9,300 per MT, reflecting the impacts of product mix, LTA modifications and other adjustments. Due to favorable mix in the quarter, the average price for our non-LTA business increased slightly to approximately $5,700 per MT. However, as anticipated, we believe the general spot price of graphite electrodes continued to trend lower during the third quarter.

The current market conditions are challenging for our customers, including those with LTAs, and we have some customers that are continuing to struggle to take their committed volumes. This is causing some non-performance and disputes, including a few arbitrations associated with, among other things, efforts to modify existing contracts. As such, we will continue to work to preserve our rights under the LTAs.

We are working hard with our valued customers to develop mutually beneficial solutions and have successfully negotiated LTA modifications with several of these customers during the third quarter. We are able to provide near-term relief in exchange for additional contractual commitments going forward. We expect to continue to finalize more of these beneficial negotiations in the coming months.

Capital Structure and Capital Allocation

During the third quarter we reduced our debt by approximately $150 million. After quarter end, we further reduced our debt by an additional $60 million, bringing 2020 debt reduction to $313 million through the end of October. We will continue to prioritize balance sheet flexibility and expect to use the majority of fourth quarter incremental free cash flow to reduce debt.

Outlook

For the remainder of 2020, we anticipate our full year LTA sales volumes to be above the midpoint of the expected range of 100 thousand - 115 thousand MT. We now expect our full year LTA revenue will be between $1,000 million and $1,080 million in 2020.

With the LTA modifications and ongoing customer discussions, we are able to provide estimated shipments of graphite electrodes for the final two years of the initial term under our LTAs and for the years 2023 through 2024 as follows:

 

2021

 

2022

 

2023 through 2024

Estimated LTA volume(1)

98-108

 

95-105

 

35-45

Estimated LTA revenue(2)

$925-$1,025

 

$910-$1,010

 

$350-$450 (3)

(1)

In thousands of metric tons

(2)

In millions

(3)

Includes expected termination fees from a few customers that have failed to meet certain obligations under their LTAs

The environmental and economic advantages of electric arc furnace steel production positions both that industry and the graphite electrode industry for continued long-term growth.

We believe GrafTech's leadership position, strong cash flows, and advantaged low cost structure and vertical integration are sustainable competitive advantages. The services and solutions we provide will position our customers and us for a better future.

Conference Call

In conjunction with this earnings release, you are invited to listen to our earnings call being held on November 3, 2020 at 10:00 a.m. Eastern Standard Time. The webcast and accompanying slide presentation will be available at www.GrafTech.com, in the Investors section. The earnings call dial-in number is +1 (866) 521-4909 toll-free in the U.S. and Canada or +1 (647) 427-2311, conference ID: 6767702 for overseas calls. A replay of the Conference Call will be available until February 3, 2021 by dialing +1 (800) 585-8367 toll-free in the U.S. and Canada or +1 (416) 621-4642 for overseas calls, conference ID: 6767702. A replay of the webcast will also be available on our website until February 3, 2021, at www.GrafTech.com, in the Investors section. GrafTech also makes its complete financial reports that have been filed with the Securities and Exchange Commission (the "SEC") and other information available at www.GrafTech.com. The information in our website is not part of this release or any report we file 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 graphite electrode manufacturing facilities, including three of the highest capacity facilities in the world. GrafTech is also the only large-scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, a key raw material for graphite electrode manufacturing. This unique position provides competitive advantages in product quality and cost.

Special note regarding Forward-Looking Statements

This news release and related discussions may contain forward-looking statements that reflect our current views with respect to, among other things, future events and financial performance. 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 news 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: the ultimate impact that the COVID-19 pandemic has on our business, results of operations, financial condition and cash flows; the cyclical nature of our business and the selling prices of our products may lead to periods of reduced profitability and net losses in the future; the possibility that we may be unable to implement our business strategies, including our ability to secure and maintain longer-term customer contracts, in an effective manner; the risks and uncertainties associated with litigation, arbitration, and like disputes, including the recently filed stockholder litigation and disputes related to contractual commitments; the possibility that global graphite electrode overcapacity may adversely affect graphite electrode prices; pricing for graphite electrodes has historically been cyclical and the price of graphite electrodes may continue to decline in the future; the sensitivity of our business and operating results to economic conditions and the possibility others may not be able to fulfill their obligations to us in a timely fashion or at all; our dependence on the global steel industry generally and the electric arc furnace steel industry in particular; the competitiveness of the graphite electrode industry; our dependence on the supply of petroleum needle coke; our dependence on supplies of raw materials (in addition to petroleum needle coke) and energy; the possibility that our manufacturing operations are subject to hazards; changes in, or more stringent enforcement of, health, safety and environmental regulations applicable to our manufacturing operations and facilities; 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 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 the COVID-19 pandemic, political crises or other catastrophic events; our dependence on third parties for certain construction, maintenance, engineering, transportation, warehousing and logistics services; 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 possibility that we may divest or acquire businesses, which could require significant management attention or disrupt our business; the sensitivity of goodwill on our balance sheet to changes in the market; the possibility that we are subject to information technology systems failures, cybersecurity attacks, network disruptions and breaches of data security; our dependence on protecting our intellectual property; the possibility that third parties may claim that our products or processes infringe their intellectual property rights; the possibility that significant changes in our jurisdictional earnings mix or in the tax laws of those jurisdictions could adversely affect our business; 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; the possibility that restrictive covenants in our financing agreements could restrict or limit our operations; the fact that borrowings under certain of our existing financing agreements subjects us to interest rate risk; the possibility of a lowering or withdrawal of the ratings assigned to our debt; the possibility that disruptions in the capital and credit markets could adversely affect our results of operations, cash flows and financial condition, or those of our customers and suppliers; the possibility that highly concentrated ownership of our common stock may prevent minority stockholders from influencing significant corporate decisions; the possibility that we may not pay cash dividends on our common stock in the future; the fact that certain of our stockholders have the right to engage or invest in the same or similar businesses as us; the possibility that the market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets, including by Brookfield Asset Management Inc. and its affiliates; the fact that certain provisions of our Amended and Restated Certificate of Incorporation and our Amended and Restated By-Laws could hinder, delay or prevent a change of control; the fact that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders; and our status as a "controlled company" within the meaning of the New York Stock Exchange corporate governance standards, which allows us to qualify for exemptions from certain corporate governance requirements.

These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements, including the Risk Factors sections included in our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2020 and June 30, 2020, 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. We do not undertake any obligation to publicly update or review any forward-looking statement, except as required by law, whether as a result of new information, future developments or otherwise.

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 and Adjusted EBITDA are non-GAAP financial measures. We define EBITDA, a non-GAAP financial measure, as net income or loss plus interest expense, minus interest income, plus income taxes, and depreciation and amortization. We define adjusted EBITDA as EBITDA plus any pension and other post-employment benefit ("OPEB") plan expenses, initial and follow-on public offering and 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, related party Tax Receivable Agreement adjustments, stock-based compensation, and non-cash fixed asset write-offs. 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. We also monitor the ratio of total debt to adjusted EBITDA, because we believe it is a useful and widely used way to assess our leverage.

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 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 initial and follow-on public offering and related expenses;
  • adjusted EBITDA does not reflect related party Tax Receivable Agreement adjustments;
  • adjusted EBITDA does not reflect stock-based compensation or the non-cash write-off of fixed assets; and
  • other companies, including companies in our industry, may calculate EBITDA and adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

In evaluating EBITDA and adjusted EBITDA, you should be aware that in the future, we will incur expenses similar to the adjustments in the reconciliation presented below. Our presentations of EBITDA and adjusted EBITDA 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 EBITDA and adjusted EBITDA alongside other financial performance measures, including our net income and other GAAP measures.

 

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

Unaudited

 
 

 

As of
September 30,
2020

 

As of
December 31,
2019

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

158,841

 

 

 

$

80,935

 

 

Accounts and notes receivable, net of allowance for doubtful accounts of
$8,973 as of September 30, 2020 and $5,474 as of December 31, 2019

164,195

 

 

 

247,051

 

 

Inventories

299,236

 

 

 

313,648

 

 

Prepaid expenses and other current assets

35,299

 

 

 

40,946

 

 

Total current assets

657,571

 

 

 

682,580

 

 

Property, plant and equipment

765,822

 

 

 

733,417

 

 

Less: accumulated depreciation

264,304

 

 

 

220,397

 

 

Net property, plant and equipment

501,518

 

 

 

513,020

 

 

Deferred income taxes

40,767

 

 

 

55,217

 

 

Goodwill

171,117

 

 

 

171,117

 

 

Other assets

96,616

 

 

 

104,230

 

 

Total assets

$

1,467,589

 

 

 

$

1,526,164

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

49,056

 

 

 

$

78,697

 

 

Short-term debt

147

 

 

 

141

 

 

Accrued income and other taxes

81,756

 

 

 

65,176

 

 

Other accrued liabilities

65,058

 

 

 

48,335

 

 

Related party payable - tax receivable agreement

16,115

 

 

 

27,857

 

 

Total current liabilities

212,132

 

 

 

220,206

 

 

 

 

 

 

Long-term debt

1,564,431

 

 

 

1,812,682

 

 

Other long-term obligations

76,403

 

 

 

72,562

 

 

Deferred income taxes

44,251

 

 

 

49,773

 

 

Related party payable - tax receivable agreement long-term

42,479

 

 

 

62,014

 

 

Stockholders’ equity:

 

 

 

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, 267,188,547
shares issued and outstanding as of September 30, 2020 and 270,485,308
as of December 31, 2019

2,672

 

 

 

2,705

 

 

Additional paid-in capital

757,576

 

 

 

765,419

 

 

Accumulated other comprehensive loss

(39,161

)

 

 

(7,361

)

 

Accumulated deficit

(1,193,194

)

 

 

(1,451,836

)

 

Total stockholders’ deficit

(472,107

)

 

 

(691,073

)

 

 

 

 

 

Total liabilities and stockholders’ equity

$

1,467,589

 

 

 

$

1,526,164

 

 

 

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands)

Unaudited

 

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

 

2020

 

 

2019

 

 

2020

 

 

2019

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

Net sales

$

286,987

 

 

 

$

420,797

 

 

 

$

886,351

 

 

 

$

1,376,181

 

 

Cost of sales

131,862

 

 

 

178,497

 

 

 

401,379

 

 

 

571,068

 

 

Gross profit

155,125

 

 

 

242,300

 

 

 

484,972

 

 

 

805,113

 

 

Research and development

650

 

 

 

611

 

 

 

2,072

 

 

 

1,961

 

 

Selling and administrative expenses

19,062

 

 

 

15,708

 

 

 

49,995

 

 

 

46,328

 

 

Operating profit

135,413

 

 

 

225,981

 

 

 

432,905

 

 

 

756,824

 

 

 

 

 

 

 

 

 

 

Other expense (income), net

694

 

 

 

(688

)

 

 

(2,309

)

 

 

642

 

 

Related party Tax Receivable Agreement benefit

 

 

 

 

 

 

(3,346

)

 

 

 

 

Interest expense

22,474

 

 

 

31,803

 

 

 

69,026

 

 

 

98,472

 

 

Interest income

(93

)

 

 

(1,765

)

 

 

(1,582

)

 

 

(2,910

)

 

Income before provision for income taxes

112,338

 

 

 

196,631

 

 

 

371,116

 

 

 

660,620

 

 

Provision for income taxes

18,104

 

 

 

20,755

 

 

 

61,838

 

 

 

90,940

 

 

Net income

$

94,234

 

 

 

$

175,876

 

 

 

$

309,278

 

 

 

$

569,680

 

 

 

 

 

 

 

 

 

 

Basic income per common share:

 

 

 

 

 

 

 

Net income per share

$

0.35

 

 

 

$

0.61

 

 

 

$

1.15

 

 

 

$

1.96

 

 

Weighted average common shares outstanding

267,265,705

 

 

 

290,112,233

 

 

 

267,908,427

 

 

 

290,410,859

 

 

Diluted income per common share:

 

 

 

 

 

 

 

Income per share

$

0.35

 

 

 

$

0.61

 

 

 

$

1.15

 

 

 

$

1.96

 

 

Weighted average common shares outstanding

267,279,555

 

 

 

290,127,296

 

 

 

267,920,890

 

 

 

290,422,351

 

 

 

 

 

 

 

 

 

 

 

GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

Unaudited

 

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Cash flow from operating activities:

 

 

 

 

 

 

 

Net income

$

94,234

 

 

 

$

175,876

 

 

 

$

309,278

 

 

 

$

569,680

 

 

Adjustments to reconcile net income to cash
provided by operations:

 

 

 

 

 

 

 

Depreciation and amortization

16,241

 

 

 

15,357

 

 

 

45,074

 

 

 

46,387

 

 

Related party Tax Receivable Agreement benefit

 

 

 

 

 

 

(3,346

)

 

 

 

 

Deferred income tax provision

2,247

 

 

 

7,413

 

 

 

16,237

 

 

 

28,696

 

 

Non-cash interest expense

1,587

 

 

 

1,588

 

 

 

4,768

 

 

 

4,764

 

 

Other charges, net

2,495

 

 

 

6,531

 

 

 

2,335

 

 

 

17,689

 

 

Net change in working capital*

23,155

 

 

 

22,238

 

 

 

85,098

 

 

 

(80,311

)

 

Change in related party Tax Receivable Agreement

 

 

 

 

 

 

(27,857

)

 

 

 

 

Change in long-term assets and liabilities

(10,950

)

 

 

(3,254

)

 

 

(14,922

)

 

 

(2,133

)

 

Net cash provided by operating activities

129,009

 

 

 

225,749

 

 

 

416,665

 

 

 

584,772

 

 

Cash flow from investing activities:

 

 

 

 

 

 

 

Capital expenditures

(6,333

)

 

 

(14,854

)

 

 

(30,688

)

 

 

(44,053

)

 

Proceeds from the sale of assets

13

 

 

 

16

 

 

 

78

 

 

 

98

 

 

Net cash used in investing activities

(6,320

)

 

 

(14,838

)

 

 

(30,610

)

 

 

(43,955

)

 

Cash flow from financing activities:

 

 

 

 

 

 

 

Repurchase of common stock - non-related party

 

 

 

(9,484

)

 

 

(30,099

)

 

 

(9,484

)

 

Payment of tax withholdings related to net share settlement of equity awards

 

 

 

 

 

 

(71

)

 

 

 

 

Principal repayments on long-term debt

(149,186

)

 

 

 

 

 

(249,214

)

 

 

(125,000

)

 

Dividends paid to non-related party

(948

)

 

 

(5,118

)

 

 

(7,553

)

 

 

(15,505

)

 

Dividends paid to related party

(1,724

)

 

 

(19,502

)

 

 

(20,650

)

 

 

(58,507

)

 

Net cash used in financing activities

(151,858

)

 

 

(34,104

)

 

 

(307,587

)

 

 

(208,496

)

 

Net change in cash and cash equivalents

(29,169

)

 

 

176,807

 

 

 

78,468

 

 

 

332,321

 

 

Effect of exchange rate changes on cash and cash equivalents

354

 

 

 

(898

)

 

 

(562

)

 

 

(1,037

)

 

Cash and cash equivalents at beginning of period

187,656

 

 

 

205,255

 

 

 

80,935

 

 

 

49,880

 

 

Cash and cash equivalents at end of period

$

158,841

 

 

 

$

381,164

 

 

 

$

158,841

 

 

 

$

381,164

 

 

 

 

 

 

 

 

 

 

* Net change in working capital due to changes in the following components:

 

 

 

 

 

 

Accounts and notes receivable, net

$

19,695

 

 

 

$

44,410

 

 

 

$

78,408

 

 

 

$

(20,727

)

 

Inventories

13,295

 

 

 

(3,809

)

 

 

10,371

 

 

 

(19,908

)

 

Prepaid expenses and other current assets

(695

)

 

 

2,395

 

 

 

5,437

 

 

 

5,703

 

 

Income taxes payable

(9,063

)

 

 

(513

)

 

 

16,032

 

 

 

(28,152

)

 

Accounts payable and accruals

(59

)

 

 

(19,548

)

 

 

(25,078

)

 

 

(17,336

)

 

Interest payable

(18

)

 

 

(697

)

 

 

(72

)

 

 

109

 

 

Net change in working capital

$

23,155

 

 

 

$

22,238

 

 

 

$

85,098

 

 

 

$

(80,311

)

 

NON-GAAP RECONCILIATION

(Dollars in thousands)

 

The following table reconciles our non-GAAP key financial measures to the most directly comparable GAAP measures:

 

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

 

2020

 

2019

 

 

2020

 

2019

 

 

 

 

 

 

 

Net income

$

94,234

 

 

$

175,876

 

 

 

$

309,278

 

 

$

569,680

 

 

Add:

 

 

 

 

 

Depreciation and amortization

16,241

 

 

15,357

 

 

 

45,074

 

 

46,387

 

 

Interest expense

22,474

 

 

31,803

 

 

 

69,026

 

 

98,472

 

 

Interest income

(93

)

 

(1,765

)

 

 

(1,582

)

 

(2,910

)

 

Income taxes

18,104

 

 

20,755

 

 

 

61,838

 

 

90,940

 

 

EBITDA

$

150,960

 

 

$

242,026

 

 

 

$

483,634

 

 

$

802,569

 

 

Adjustments:

 

 

 

 

 

Pension and OPEB plan expenses (1)

583

 

 

800

 

 

 

1,666

 

 

2,397

 

 

Initial and follow-on public offering and related expenses (2)

 

 

160

 

 

 

4

 

 

1,409

 

 

Non-cash loss (gain) on foreign currency remeasurement (3)

798

 

 

(185

)

 

 

(441

)

 

842

 

 

Stock-based compensation (4)

764

 

 

706

 

 

 

1,891

 

 

1,568

 

 

Non-cash fixed asset write-off (5)

 

 

1,947

 

 

 

 

 

4,888

 

 

Related party Tax Receivable Agreement adjustment (6)

 

 

 

 

 

(3,346

)

 

 

 

Adjusted EBITDA

$

153,105

 

 

$

245,454

 

 

 

$

483,408

 

 

$

813,673

 

 

(1)

Service and interest cost of our OPEB plans. Also includes a mark-to-market loss (gain) for plan assets as of December of each year.

(2)

Legal, accounting, printing and registration fees associated with the initial and follow-on public offering and related expenses.

(3)

Non-cash gains and losses 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.

(4)

Non-cash expense for stock-based compensation grants.

(5)

Non-cash fixed asset write-off recorded for obsolete assets.

(6)

Non-cash expense adjustment for future payment to our sole pre-IPO stockholder for tax assets that are expected to be utilized.


1 Source: World Steel Association and Metal Expert.
2 Source: American Iron and Steel Institute.

Wendy Watson
216-676-2000

Source: GrafTech International Ltd.

Categories: Press Releases
View all news