Market Overview

GrafTech Reports Third Quarter 2019 Results

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GrafTech International Ltd. (NYSE:EAF) (GrafTech or the Company) today announced financial results for the quarter ended September 30, 2019, including net income of $176 million, or $0.61 per share, and Adjusted EBITDA from continuing operations1 of $245 million.

"GrafTech reported third quarter cash flow from operating activities of just over $225 million. During the third quarter we managed production to align with recent sales volumes while also maintaining cost discipline," said David Rintoul, President and Chief Executive Officer. "Continued meaningful cash flow generation enables us to balance our primary financial objectives - to return cash to shareholders and repay debt - while also investing appropriate capital in the business."

Key Financial Measures

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

(dollars in thousands, except per share amounts)

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

Net sales

$

420,797

 

$

454,890

 

 

$

1,376,181

 

$

1,363,121

 

Net income

$

175,876

 

$

199,466

 

 

$

569,680

 

$

624,587

 

Earnings per share (1)

$

0.61

 

$

0.67

 

 

$

1.96

 

$

2.08

 

Adjusted EBITDA from continuing operations (2)

$

245,454

 

$

276,812

 

 

$

813,673

 

$

879,108

 

(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 and during the third quarter of 2019, resulting in weighted average shares outstanding of 290,127,296 and 296,145,453 for the three months ended September 30, 2019 and 2018, respectively and 290,422,351 and 300,178,704 for the nine months ended September 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 September 30, 2019 were $421 million compared to $455 million in the third quarter of 2018. Sales volumes of GrafTech manufactured product decreased to 40 thousand metric tons (MT) from 42 thousand metric tons in the prior year period. The weighted average realized price of these graphite electrodes was $9,960 per metric ton.

Net income for the third quarter of 2019 was $176 million, or $0.61 per share, compared to $199 million, or $0.67 per share in the third quarter of 2018. Adjusted EBITDA from continuing operations was $245 million in the third quarter of 2019 compared to $277 million in the third quarter of 2018. Financial results for the third quarter of 2019 were impacted by lower net sales and higher raw materials costs related to third party petroleum needle coke.

Cash flow from operating activities was $226 million in the third quarter of 2019 compared to $235 million in the comparable period of 2018. Lower net sales and higher raw materials costs were partially offset by timing of working capital changes.

Key operating metrics(1)

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

(in thousands, except price data)

2019

2018

 

2019

2018

Sales volume (MT) (2)

40

 

42

 

 

130

 

126

 

Weighted average realized price (3)

$

9,960

 

$

9,664

 

 

$

9,977

 

$

9,811

 

Production volume (MT) (4)

40

 

39

 

 

136

 

127

 

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

48

 

39

 

 

150

 

128

 

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