GrafTech Reports Fourth Quarter and Full Year 2024 Results
Successfully Executed Initiatives to Grow Volume, Reduce Costs and Manage Working Capital Levels
Completed Financing Transactions to Bolster Liquidity and Extend Debt Maturities
Announcing Further Initiatives to Improve Profitability Levels
Fourth Quarter 2024 Highlights
-
Exceeded cost reduction guidance, achieving a
25% year-over-year reduction in cash costs per metric ton ("MT") for the fourth quarter and a23% reduction on a full-year basis -
Grew sales volume
13% year-over-year to 27.2 thousand MT - Achieved fourth consecutive quarter of sequential sales volume growth
-
Completed financing transactions, ending 2024 with total liquidity of
$464 million
Fourth Quarter 2024 Summary
-
Net sales of
$134 million -
Net loss of
$49 million $0.19 -
Adjusted EBITDA(2) of negative
$7 million -
Net cash used in operating activities of
$26 million -
Adjusted free cash flow(2) of negative
$21 million
CEO Comments
"We successfully delivered on our stated initiatives for 2024 to grow volume and market share, to cut costs and to manage our working capital and capital expenditure levels," said Timothy Flanagan, Chief Executive Officer and President. “For the full year, we grew sales volume
"As we enter 2025, we remain relentlessly focused on managing what is within our control," continued Mr. Flanagan. "However, as graphite electrode demand remains muted and competitive pressures have persisted in many of our key regions, the pricing environment remains unsustainably low. As a result, we are taking further 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 business to regions where there is an opportunity to capture higher average selling prices. In addition, we have informed our customers of our intention to increase prices by
Fourth Quarter and Full Year 2024 Financial Performance |
||||||||||||||||
(dollars in thousands, except per share amounts) |
|
|
Year Ended |
|||||||||||||
|
|
December 31, |
||||||||||||||
Q4 2024 |
Q3 2024 |
Q4 2023 |
|
|
2024 |
|
|
2023 |
|
|||||||
Net sales |
$ |
134,217 |
|
$ |
130,654 |
|
$ |
137,145 |
|
|
$ |
538,782 |
|
$ |
620,500 |
|
Net loss |
$ |
(49,476 |
) |
$ |
(36,068 |
) |
$ |
(217,409 |
) |
|
$ |
(131,165 |
) |
$ |
(255,250 |
) |
Loss per share(1) |
$ |
(0.19 |
) |
$ |
(0.14 |
) |
$ |
(0.85 |
) |
|
$ |
(0.51 |
) |
$ |
(0.99 |
) |
Net cash (used in) provided by operating activities |
$ |
(26,417 |
) |
$ |
23,709 |
|
$ |
9,292 |
|
|
$ |
(40,093 |
) |
$ |
76,561 |
|
|
|
|
|
|
|
|
||||||||||
Adjusted net loss(2) |
$ |
(33,143 |
) |
$ |
(34,276 |
) |
$ |
(68,569 |
) |
|
$ |
(106,144 |
) |
$ |
(100,752 |
) |
Adjusted loss per share(1)(2) |
$ |
(0.13 |
) |
$ |
(0.13 |
) |
$ |
(0.27 |
) |
|
$ |
(0.41 |
) |
$ |
(0.39 |
) |
Adjusted EBITDA(2) |
$ |
(6,859 |
) |
$ |
(6,196 |
) |
$ |
(21,572 |
) |
|
$ |
1,632 |
|
$ |
20,484 |
|
Adjusted free cash flow(2) |
$ |
(20,960 |
) |
$ |
19,682 |
|
$ |
3,539 |
|
|
$ |
(56,153 |
) |
$ |
49,974 |
|
For the fourth quarter of 2024, sales volume increased
Net loss for the fourth quarter of 2024 was
Adjusted EBITDA(2) was negative
In the fourth quarter of 2024, net cash used in operating activities was
For the year ended December 31, 2024, sales volume increased
Net loss for the year ended December 31, 2024 was
Adjusted EBITDA(2) for 2024 was
Net cash used in operating activities for the year ended December 31, 2024 was
Operational and Commercial Update |
|||||||||||
Key Operating Metrics |
|
|
|
|
Year Ended |
||||||
|
|
|
|
|
December 31, |
||||||
(in thousands, except percentages) |
Q4 2024 |
Q3 2024 |
Q4 2023 |
|
2024 |
2023 |
|||||
Sales volume (MT) |
27.2 |
|
26.4 |
|
24.1 |
|
|
103.2 |
|
91.6 |
|
Production volume (MT)(3) |
25.1 |
|
19.4 |
|
24.4 |
|
|
97.3 |
|
88.1 |
|
Production capacity (MT)(4)(5) |
46.0 |
|
42.0 |
|
52.0 |
|
|
178.0 |
|
202.0 |
|
Capacity utilization(6) |
55 |
% |
46 |
% |
47 |
% |
|
55 |
% |
44 |
% |
Sales volume for the fourth quarter of 2024 was 27.2 thousand MT, consisting of 23.9 thousand MT of non-LTA volume and 3.2 thousand MT of LTA volume.
For the fourth quarter of 2024, the weighted-average realized price for our non-LTA volume was approximately
Production volume was 25.1 thousand MT in the fourth quarter of 2024, an increase of
Capital Structure and Liquidity
During the fourth quarter of 2024, we completed the previously announced capital transactions which provided incremental liquidity and extended our debt maturities. As of December 31, 2024, we had liquidity of
Outlook
In 2024, steel industry production remained constrained by global economic and geopolitical uncertainty. As we enter 2025, industry analyst projections indicate a modest recovery in global steel demand is expected for the year. However, significant geopolitical uncertainty remains, including the potential impact of policymaking on the interest rate environment, global trade and decarbonization policies. As we closely monitor all of these developments and assess their potential impact on the commercial environment for graphite electrodes, our current outlook is that demand for graphite electrodes in the near term will remain relatively flat in the key regions in which we operate.
For GrafTech, despite the industry-wide headwinds, we anticipate a low double-digit percentage point 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. Of our anticipated 2025 sales volume, to date, we have over
As it relates to price, challenging pricing dynamics have persisted in most regions and the pricing environment remains unsustainably low. As a result, we are taking further 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 business to regions where there is an opportunity to capture higher average selling prices. In addition, we have informed our customers of our intention to increase prices by
As it relates to costs, we will continue to execute our initiatives to improve our cost structure. Reflecting these actions and the benefit of the anticipated increase in our sales and production volume levels, we expect a mid-single digit percentage point decline in our cash cost of goods sold per MT for 2025 compared to 2024.
In addition, we will continue to closely manage our working capital levels and capital expenditures. For 2025, we expect the net impact of working capital will be favorable to our full year cash flow performance, although to a lesser extent than in each of the previous two years which reflected our efforts to align inventory levels with our view on demand. We anticipate our full year 2025 capital expenditures will be approximately
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 February 7, 2025 at 10:00 a.m. (EST). The webcast and accompanying slide presentation will be available on our investor relations website at: http://ir.graftech.com. The earnings call dial-in number is +1 (800) 717-1738 toll-free in
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 |
(3) |
Production volume reflects graphite electrodes we produced during the period. |
(4) |
Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production may vary. |
(5) |
Includes graphite electrode facilities in Calais, |
(6) |
Capacity utilization reflects production volume as a percentage of production capacity. |
(7) |
Gross debt reflects the notional value of our outstanding debt and excludes unamortized debt discount and issuance costs. |
(8) |
A non-GAAP financial measure, net debt is calculated as gross debt minus cash and cash equivalents (December 31, 2024 gross debt of |
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
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 most recent Annual Report on Form 10-K 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 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
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 or the income tax benefit 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;
- adjusted EBITDA does not reflect goodwill impairment charges; 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. 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 or received from the settlement of interest rate swap contracts and 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, debt servicing 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
|
|||||||
|
December 31, 2024 |
|
December 31, 2023 |
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
256,248 |
|
|
$ |
176,878 |
|
Accounts and notes receivable, net of allowance for doubtful accounts of |
|
93,576 |
|
|
|
101,387 |
|
Inventories |
|
231,241 |
|
|
|
330,146 |
|
Prepaid expenses and other current assets |
|
55,732 |
|
|
|
66,382 |
|
Total current assets |
|
636,797 |
|
|
|
674,793 |
|
Property, plant and equipment |
|
910,247 |
|
|
|
920,444 |
|
Less: accumulated depreciation |
|
427,548 |
|
|
|
398,330 |
|
Net property, plant and equipment |
|
482,699 |
|
|
|
522,114 |
|
Deferred income taxes |
|
53,139 |
|
|
|
31,542 |
|
Other assets |
|
51,639 |
|
|
|
60,440 |
|
Total assets |
$ |
1,224,274 |
|
|
$ |
1,288,889 |
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
72,833 |
|
|
$ |
83,268 |
|
Long-term debt, current maturities |
|
— |
|
|
|
134 |
|
Accrued income and other taxes |
|
9,642 |
|
|
|
10,022 |
|
Other accrued liabilities |
|
55,432 |
|
|
|
91,702 |
|
Tax Receivable Agreement |
|
2,022 |
|
|
|
5,417 |
|
Total current liabilities |
|
139,929 |
|
|
|
190,543 |
|
|
|
|
|
||||
Long-term debt |
|
1,086,915 |
|
|
|
925,511 |
|
Other long-term obligations |
|
48,559 |
|
|
|
55,645 |
|
Deferred income taxes |
|
23,971 |
|
|
|
33,206 |
|
Tax Receivable Agreement long-term |
|
3,802 |
|
|
|
5,737 |
|
Stockholders’ (deficit) equity: |
|
|
|
||||
Preferred stock, par value |
|
— |
|
|
|
— |
|
Common stock, par value |
|
2,572 |
|
|
|
2,568 |
|
Additional paid-in capital |
|
755,338 |
|
|
|
749,527 |
|
Accumulated other comprehensive loss |
|
(43,359 |
) |
|
|
(11,458 |
) |
Accumulated deficit |
|
(793,453 |
) |
|
|
(662,390 |
) |
Total stockholders’ (deficit) equity |
|
(78,902 |
) |
|
|
78,247 |
|
Total liabilities and stockholders’ (deficit) equity |
$ |
1,224,274 |
|
|
$ |
1,288,889 |
|
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
|
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
134,217 |
|
|
$ |
137,145 |
|
|
$ |
538,782 |
|
|
$ |
620,500 |
|
Cost of goods sold |
|
131,698 |
|
|
|
144,393 |
|
|
|
533,757 |
|
|
|
571,857 |
|
Lower of cost or market inventory valuation adjustment |
|
12,962 |
|
|
|
12,431 |
|
|
|
24,878 |
|
|
|
12,431 |
|
Gross (loss) profit |
|
(10,443 |
) |
|
|
(19,679 |
) |
|
|
(19,853 |
) |
|
|
36,212 |
|
Research and development |
|
1,387 |
|
|
|
1,837 |
|
|
|
5,706 |
|
|
|
5,520 |
|
Selling and administrative expenses |
|
13,075 |
|
|
|
15,079 |
|
|
|
46,510 |
|
|
|
74,012 |
|
Rationalization expenses |
|
— |
|
|
|
— |
|
|
|
3,156 |
|
|
|
— |
|
Goodwill impairment charges |
|
— |
|
|
|
171,117 |
|
|
|
— |
|
|
|
171,117 |
|
Operating loss |
|
(24,905 |
) |
|
|
(207,712 |
) |
|
|
(75,225 |
) |
|
|
(214,437 |
) |
|
|
|
|
|
|
|
|
||||||||
Other expense (income), net |
|
200 |
|
|
|
3,418 |
|
|
|
(1,569 |
) |
|
|
4,679 |
|
Interest expense |
|
37,575 |
|
|
|
15,655 |
|
|
|
85,313 |
|
|
|
58,087 |
|
Interest income |
|
(1,226 |
) |
|
|
(1,681 |
) |
|
|
(5,701 |
) |
|
|
(3,439 |
) |
Loss before income taxes |
|
(61,454 |
) |
|
|
(225,104 |
) |
|
|
(153,268 |
) |
|
|
(273,764 |
) |
Income tax benefit |
|
(11,978 |
) |
|
|
(7,695 |
) |
|
|
(22,103 |
) |
|
|
(18,514 |
) |
Net loss |
$ |
(49,476 |
) |
|
$ |
(217,409 |
) |
|
$ |
(131,165 |
) |
|
$ |
(255,250 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic loss per common share: |
|
|
|
|
|
|
|
||||||||
Net loss per share |
$ |
(0.19 |
) |
|
$ |
(0.85 |
) |
|
$ |
(0.51 |
) |
|
$ |
(0.99 |
) |
Weighted average common shares outstanding |
|
257,967,374 |
|
|
|
257,205,583 |
|
|
|
257,667,125 |
|
|
|
257,042,843 |
|
Diluted loss per common share: |
|
|
|
|
|
|
|
||||||||
Net loss per share |
$ |
(0.19 |
) |
|
$ |
(0.85 |
) |
|
$ |
(0.51 |
) |
|
$ |
(0.99 |
) |
Weighted average common shares outstanding |
|
257,967,374 |
|
|
|
257,205,583 |
|
|
|
257,667,125 |
|
|
|
257,042,843 |
|
|
|
|
|
|
|
|
|
||||||||
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
|
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Cash flow from operating activities: |
|
|
|
|
|
|
|
||||||||
Net loss |
$ |
(49,476 |
) |
|
$ |
(217,409 |
) |
|
$ |
(131,165 |
) |
|
$ |
(255,250 |
) |
Adjustments to reconcile net loss to cash (used in) provided by operations: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
16,110 |
|
|
|
13,836 |
|
|
|
62,245 |
|
|
|
56,889 |
|
Deferred income tax benefit |
|
(15,891 |
) |
|
|
(17,826 |
) |
|
|
(27,634 |
) |
|
|
(28,123 |
) |
Non-cash stock-based compensation expense |
|
1,589 |
|
|
|
624 |
|
|
|
6,035 |
|
|
|
4,433 |
|
Non-cash interest expense |
|
1,550 |
|
|
|
(1,463 |
) |
|
|
(2,028 |
) |
|
|
8,786 |
|
Goodwill impairment charges |
|
— |
|
|
|
171,117 |
|
|
|
— |
|
|
|
171,117 |
|
Lower of cost or market inventory valuation adjustment |
|
12,962 |
|
|
|
12,431 |
|
|
|
24,878 |
|
|
|
12,431 |
|
Other adjustments |
|
1,302 |
|
|
|
8,355 |
|
|
|
6,283 |
|
|
|
5,077 |
|
Net change in working capital* |
|
10,543 |
|
|
|
42,729 |
|
|
|
40,254 |
|
|
|
107,562 |
|
Change in Tax Receivable Agreement |
|
87 |
|
|
|
233 |
|
|
|
(5,330 |
) |
|
|
(4,398 |
) |
Change in long-term assets and liabilities |
|
(5,193 |
) |
|
|
(3,335 |
) |
|
|
(13,631 |
) |
|
|
(1,963 |
) |
Net cash (used in) provided by operating activities |
|
(26,417 |
) |
|
|
9,292 |
|
|
|
(40,093 |
) |
|
|
76,561 |
|
Cash flow from investing activities: |
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
(12,792 |
) |
|
|
(5,753 |
) |
|
|
(34,309 |
) |
|
|
(54,040 |
) |
Proceeds from the sale of fixed assets |
|
— |
|
|
|
— |
|
|
|
100 |
|
|
|
220 |
|
Net cash used in investing activities |
|
(12,792 |
) |
|
|
(5,753 |
) |
|
|
(34,209 |
) |
|
|
(53,820 |
) |
Cash flow from financing activities: |
|
|
|
|
|
|
|
||||||||
Proceeds from term loan |
|
175,000 |
|
|
|
— |
|
|
|
175,000 |
|
|
|
— |
|
Proceeds from issuance of long-term debt, net of original issuance discount |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
438,552 |
|
Principal payments on long-term debt |
|
(137 |
) |
|
|
(133 |
) |
|
|
(137 |
) |
|
|
(433,841 |
) |
Debt issuance costs |
|
(18,945 |
) |
|
|
(19 |
) |
|
|
(18,945 |
) |
|
|
(8,152 |
) |
Interest rate swap settlements |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
27,453 |
|
Payments for taxes related to net share settlement of equity awards |
|
(36 |
) |
|
|
— |
|
|
|
(118 |
) |
|
|
(129 |
) |
Dividends paid |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,134 |
) |
Principal payments under finance lease obligations |
|
(24 |
) |
|
|
(16 |
) |
|
|
(82 |
) |
|
|
(36 |
) |
Net cash provided by (used in) financing activities |
|
155,858 |
|
|
|
(168 |
) |
|
|
155,718 |
|
|
|
18,713 |
|
Net change in cash and cash equivalents |
|
116,649 |
|
|
|
3,371 |
|
|
|
81,416 |
|
|
|
41,454 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(1,807 |
) |
|
|
700 |
|
|
|
(2,046 |
) |
|
|
783 |
|
Cash and cash equivalents at beginning of period |
|
141,406 |
|
|
|
172,807 |
|
|
|
176,878 |
|
|
|
134,641 |
|
Cash and cash equivalents at end of period |
$ |
256,248 |
|
|
$ |
176,878 |
|
|
$ |
256,248 |
|
|
$ |
176,878 |
|
|
|
|
|
|
|
|
|
||||||||
* Net change in working capital due to changes in the following components: |
|
|
|
|
|
|
|||||||||
Accounts and notes receivable, net |
$ |
(6,682 |
) |
|
$ |
(2,327 |
) |
|
$ |
4,519 |
|
|
$ |
45,680 |
|
Inventories |
|
18,727 |
|
|
|
38,538 |
|
|
|
68,832 |
|
|
|
107,796 |
|
Prepaid expenses and other current assets |
|
6,296 |
|
|
|
(1,622 |
) |
|
|
9,106 |
|
|
|
3,352 |
|
Income taxes payable |
|
1,067 |
|
|
|
4,158 |
|
|
|
(1,549 |
) |
|
|
(27,198 |
) |
Accounts payable and accruals |
|
9,165 |
|
|
|
19,515 |
|
|
|
(39,501 |
) |
|
|
(23,876 |
) |
Interest payable |
|
(18,030 |
) |
|
|
(15,533 |
) |
|
|
(1,153 |
) |
|
|
1,808 |
|
Net change in working capital |
$ |
10,543 |
|
|
$ |
42,729 |
|
|
$ |
40,254 |
|
|
$ |
107,562 |
|
NON-GAAP RECONCILIATIONS
|
|||||||||||||||
Reconciliation of Net Loss to Adjusted Net Loss |
|
||||||||||||||
|
|
|
|
Year Ended December 31, |
|||||||||||
|
Q4 2024 |
Q3 2024 |
Q4 2023 |
|
2024 |
|
|
2023 |
|
||||||
|
|
|
|
|
|
||||||||||
Net loss |
$ |
(49,476 |
) |
$ |
(36,068 |
) |
$ |
(217,409 |
) |
$ |
(131,165 |
) |
$ |
(255,250 |
) |
|
|
|
|
|
|
||||||||||
Diluted loss per common share: |
|
|
|
|
|
||||||||||
Net loss per share |
$ |
(0.19 |
) |
$ |
(0.14 |
) |
$ |
(0.85 |
) |
$ |
(0.51 |
) |
$ |
(0.99 |
) |
Weighted average shares outstanding |
|
257,967,374 |
|
|
257,694,799 |
|
|
257,205,583 |
|
|
257,667,125 |
|
|
257,042,843 |
|
|
|
|
|
|
|
||||||||||
Adjustments, pre-tax: |
|
|
|
|
|
||||||||||
Pension and OPEB expenses(1) |
|
967 |
|
|
479 |
|
|
3,578 |
|
|
2,270 |
|
|
6,309 |
|
Rationalization expenses(2) |
|
— |
|
|
(99 |
) |
|
— |
|
|
3,156 |
|
|
— |
|
Rationalization-related expenses(3) |
|
— |
|
|
— |
|
|
— |
|
|
2,655 |
|
|
— |
|
Non-cash (gains) losses on foreign currency remeasurement(4) |
|
(507 |
) |
|
(352 |
) |
|
170 |
|
|
(1,949 |
) |
|
603 |
|
Stock-based compensation expense(5) |
|
1,589 |
|
|
1,838 |
|
|
624 |
|
|
6,035 |
|
|
4,433 |
|
Proxy contest expenses(6) |
|
— |
|
|
— |
|
|
— |
|
|
752 |
|
|
— |
|
Tax Receivable Agreement adjustment(7) |
|
87 |
|
|
— |
|
|
233 |
|
|
124 |
|
|
249 |
|
Debt modification costs(8) |
|
18,369 |
|
|
— |
|
|
— |
|
|
18,369 |
|
|
— |
|
Goodwill impairment charges(9) |
|
— |
|
|
— |
|
|
171,117 |
|
|
— |
|
|
171,117 |
|
Total non-GAAP adjustments pre-tax |
|
20,505 |
|
|
1,866 |
|
|
175,722 |
|
|
31,412 |
|
|
182,711 |
|
Income tax impact on non-GAAP adjustments(10) |
|
4,172 |
|
|
74 |
|
|
26,882 |
|
|
6,391 |
|
|
28,213 |
|
Adjusted net loss |
$ |
(33,143 |
) |
$ |
(34,276 |
) |
$ |
(68,569 |
) |
$ |
(106,144 |
) |
$ |
(100,752 |
) |
Reconciliation of Loss Per Share to Adjusted Loss Per Share |
|
||||||||||||||
|
|
|
|
Year Ended December 31, |
|||||||||||
|
Q4 2024 |
Q3 2024 |
Q4 2023 |
|
2024 |
|
|
2023 |
|
||||||
|
|
|
|
|
|
||||||||||
Loss per share |
$ |
(0.19 |
) |
$ |
(0.14 |
) |
$ |
(0.85 |
) |
$ |
(0.51 |
) |
$ |
(0.99 |
) |
Adjustments per share: |
|
|
|
|
|
||||||||||
Pension and OPEB expenses(1) |
|
— |
|
|
— |
|
|
0.01 |
|
|
0.01 |
|
|
0.02 |
|
Rationalization expenses(2) |
|
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
|
— |
|
Rationalization-related expenses(3) |
|
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
|
— |
|
Non-cash (gains) losses on foreign currency remeasurement(4) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Stock-based compensation expense(5) |
|
0.01 |
|
|
0.01 |
|
|
— |
|
|
0.02 |
|
|
0.02 |
|
Proxy contest expenses(6) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Tax Receivable Agreement adjustment(7) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Debt modification costs(8) |
|
0.07 |
|
|
— |
|
|
— |
|
|
0.07 |
|
|
— |
|
Goodwill impairment charges(9) |
|
— |
|
|
— |
|
|
0.67 |
|
|
— |
|
|
0.67 |
|
Total non-GAAP adjustments pre-tax per share |
|
0.08 |
|
|
0.01 |
|
|
0.68 |
|
|
0.12 |
|
|
0.71 |
|
Income tax impact on non-GAAP adjustments per share(10) |
|
0.02 |
|
|
— |
|
|
0.10 |
|
|
0.02 |
|
|
0.11 |
|
Adjusted loss per share |
$ |
(0.13 |
) |
$ |
(0.13 |
) |
$ |
(0.27 |
) |
$ |
(0.41 |
) |
$ |
(0.39 |
) |
Reconciliation of Net Loss to Adjusted EBITDA |
|
||||||||||||||
|
|
|
|
Year Ended December 31, |
|||||||||||
|
Q4 2024 |
Q3 2024 |
Q4 2023 |
|
2024 |
|
|
2023 |
|
||||||
|
|
|
|
|
|
||||||||||
Net loss |
$ |
(49,476 |
) |
$ |
(36,068 |
) |
$ |
(217,409 |
) |
$ |
(131,165 |
) |
$ |
(255,250 |
) |
Add: |
|
|
|
|
|
||||||||||
Depreciation and amortization |
|
16,110 |
|
|
17,933 |
|
|
13,836 |
|
|
62,245 |
|
|
56,889 |
|
Interest expense |
|
37,575 |
|
|
16,503 |
|
|
15,655 |
|
|
85,313 |
|
|
58,087 |
|
Interest income |
|
(1,226 |
) |
|
(1,098 |
) |
|
(1,681 |
) |
|
(5,701 |
) |
|
(3,439 |
) |
Income taxes |
|
(11,978 |
) |
|
(5,332 |
) |
|
(7,695 |
) |
|
(22,103 |
) |
|
(18,514 |
) |
EBITDA |
|
(8,995 |
) |
|
(8,062 |
) |
|
(197,294 |
) |
|
(11,411 |
) |
|
(162,227 |
) |
Adjustments: |
|
|
|
|
|
||||||||||
Pension and OPEB expenses(1) |
|
967 |
|
|
479 |
|
|
3,578 |
|
|
2,270 |
|
|
6,309 |
|
Rationalization expenses(2) |
|
— |
|
|
(99 |
) |
|
— |
|
|
3,156 |
|
|
— |
|
Rationalization-related expenses(3) |
|
— |
|
|
— |
|
|
— |
|
|
2,655 |
|
|
— |
|
Non-cash (gains) losses on foreign currency remeasurement(4) |
|
(507 |
) |
|
(352 |
) |
|
170 |
|
|
(1,949 |
) |
|
603 |
|
Stock-based compensation expense(5) |
|
1,589 |
|
|
1,838 |
|
|
624 |
|
|
6,035 |
|
|
4,433 |
|
Proxy contest expenses(6) |
|
— |
|
|
— |
|
|
— |
|
|
752 |
|
|
— |
|
Tax Receivable Agreement adjustment(7) |
|
87 |
|
|
— |
|
|
233 |
|
|
124 |
|
|
249 |
|
Goodwill impairment charges(9) |
|
— |
|
|
— |
|
|
171,117 |
|
|
— |
|
|
171,117 |
|
Adjusted EBITDA |
$ |
(6,859 |
) |
$ |
(6,196 |
) |
$ |
(21,572 |
) |
$ |
1,632 |
|
$ |
20,484 |
|
Reconciliation of Net Cash (Used in) Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow |
|||||||||||||||
|
|
|
|
Year Ended December 31, |
|||||||||||
|
Q4 2024 |
Q3 2024 |
Q4 2023 |
|
2024 |
|
|
2023 |
|
||||||
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities |
$ |
(26,417 |
) |
$ |
23,709 |
|
$ |
9,292 |
|
$ |
(40,093 |
) |
$ |
76,561 |
|
Capital expenditures |
|
(12,792 |
) |
|
(4,027 |
) |
|
(5,753 |
) |
|
(34,309 |
) |
|
(54,040 |
) |
Free cash flow |
|
(39,209 |
) |
|
19,682 |
|
|
3,539 |
|
|
(74,402 |
) |
|
22,521 |
|
|
|
|
|
|
|
||||||||||
Debt modification costs(11) |
|
18,249 |
|
|
— |
|
|
— |
|
|
18,249 |
|
|
— |
|
Interest rate swap settlements(12) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
27,453 |
|
Adjusted free cash flow |
$ |
(20,960 |
) |
$ |
19,682 |
|
$ |
3,539 |
|
$ |
(56,153 |
) |
$ |
49,974 |
|
Reconciliation of Cost of Goods Sold to Cash Cost of Goods Sold per MT |
|
|
||||||||
|
|
Year Ended December 31, |
||||||||
|
Q4 2024 |
Q3 2024 |
Q4 2023 |
2024 |
2023 |
|||||
|
|
|
|
|
|
|||||
Cost of goods sold |
$ |
131,698 |
$ |
134,885 |
$ |
144,393 |
$ |
533,757 |
$ |
571,857 |
Less: |
|
|
|
|
|
|||||
Depreciation and amortization(13) |
|
14,466 |
|
16,281 |
|
12,163 |
|
55,602 |
|
50,124 |
Cost of goods sold - by-products and other(14) |
|
6,094 |
|
7,806 |
|
780 |
|
32,801 |
|
14,500 |
Rationalization-related expenses(3) |
|
— |
|
— |
|
— |
|
2,655 |
|
— |
Cash cost of goods sold |
|
111,138 |
|
110,798 |
|
131,450 |
|
442,699 |
|
507,233 |
Sales volume (in thousands of MT) |
|
27.2 |
|
26.4 |
|
24.1 |
|
103.2 |
|
91.6 |
Cash cost of goods sold per MT |
$ |
4,086 |
$ |
4,197 |
$ |
5,454 |
$ |
4,290 |
$ |
5,537 |
(1) |
Net periodic benefit cost for our pension and OPEB plans, including a mark-to-market adjustment, representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience. We recognize the actuarial gains and losses in connection with the annual remeasurement in earnings in the fourth quarter of each year. |
||
(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 (gains) losses from foreign currency remeasurement of non-operating assets and liabilities of our non- |
||
(5) |
Non-cash expense for stock-based compensation awards. |
||
(6) |
Expenses associated with our proxy contest. |
||
(7) |
Non-cash expense adjustment for future payment to our sole pre-initial public offering stockholder for tax assets that have been utilized. |
||
(8) |
Debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Consolidated Statements of Operations. |
||
(9) |
Non-cash goodwill impairment charges. |
||
(10) |
The tax impact on the non-GAAP adjustments is affected by their tax deductibility and the applicable jurisdictional tax rates. |
||
(11) |
Cash payments of debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Consolidated Statements of Operations and recognized in net cash (used in) provided by operating activities on the Consolidated Statements of Cash Flows. |
||
(12) |
Receipt of cash related to the monthly settlement of our interest rate swap contracts prior to their termination in the second quarter of 2023, as well as receipt of cash related to the termination of the interest rate swap contracts. |
||
(13) |
Reflects the portion of depreciation and amortization that is recognized in cost of goods sold. |
||
(14) |
Primarily reflects cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes. |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20250206173148/en/
Michael Dillon
216-676-2000
investor.relations@graftech.com
Source: GrafTech International Ltd.
