Market Overview

GrafTech Reports Second Quarter 2019 Results

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GrafTech International Ltd. (NYSE:EAF) (GrafTech or the Company) today announced financial results for the quarter ended June 30, 2019, including net income of $196 million, or $0.68 per share, and Adjusted EBITDA from continuing operations of $284 million.

"GrafTech reported another successful quarter including net sales of $480 million and net income of $196 million," said David Rintoul, President and Chief Executive Officer. "Solid financial results enable us to continue to return cash to shareholders and strengthen our balance sheet. To that end, this morning, we announced that our Board of Directors has authorized the repurchase of up to $100 million of our common stock on the open market. This equates to the repurchase of up to 15% of our public equity float based on the current market price."

Key Financial Measures

 

For the Three Months

Ended June 30,

 

For the Six Months

Ended June 30,

(dollars in thousands, except per share amounts)

2019

2018

 

2019

2018

 

 

 

 

 

 

Net sales

$

480,390

 

$

456,332

 

 

$

955,384

 

$

908,231

 

Net income

$

196,368

 

$

201,448

 

 

$

393,804

 

$

425,121

 

Earnings per share (1)

$

0.68

 

$

0.67

 

 

$

1.36

 

$

1.41

 

Adjusted EBITDA from continuing operations (2)

$

284,404

 

$

291,956

 

 

$

568,219

 

$

602,295

 

(1)

 

Earnings per share represents diluted earnings per share after giving effect to the stock split effected on April 12, 2018 for all periods and the share repurchase effected on August 13, 2018, resulting in weighted average shares outstanding of 290,574,153 and 302,231,431 for the three months ended June 30, 2019 and 2018, respectively and 290,571,132 and 302,228,712 for the six months ended June 30, 2019 and 2018, respectively.

(2)

 

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

Net sales for the quarter ended June 30, 2019 increased to $480 million compared to $456 million in the second quarter of 2018. The improvement was due to higher sales volumes and prices of GrafTech manufactured graphite electrodes. These sales volumes increased to 45 thousand metric tons (MT) from 42 thousand metric tons in the prior year period. The weighted average realized price of these graphite electrodes was $10,014 per metric ton, up slightly from the prior year period.

Net income for the second quarter of 2019 decreased to $196 million, or $0.68 per share, compared to $201 million, or $0.67 per share in the second quarter of 2018. Adjusted EBITDA from continuing operations also decreased to $284 million in the second quarter of 2019 compared to $292 million in the second quarter of 2018. Higher graphite electrode sales volumes were offset by higher cost of sales due to higher prices for third party needle coke.

Cash flow from operating activities decreased to $202 million in the second quarter of 2019 from $237 million in the comparable period of 2018 primarily due to timing of working capital changes.

Key operating metrics(1)

 

For the Three

Months Ended

June 30,

 

For the Six

Months Ended

June 30,

(in thousands, except price data)

2019

2018

 

2019

2018

Sales volume (MT) (2)

45

 

42

 

 

90

 

84

 

Weighted average realized price (3)

$

10,014

 

$

9,783

 

 

$

9,984

 

$

9,885

 

Production volume (MT) (4)

48

 

45

 

 

95

 

88

 

Production capacity excluding St. Marys during idle period (MT) (5)(6)

51

 

45

 

 

102

 

89

 

Capacity utilization excluding St. Marys during idle period (5)(7)

94

%

100

%

 

93

%

99

%

Total production capacity (MT) (6)(8)

58

 

52

 

 

116

 

103

 
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