Generates sequential fourth quarter improvement
across key financial metrics
GrafTech International Ltd. (NYSE: EAF) (GrafTech or the
Company) today announced unaudited financial results for the fourth
quarter and full year ended December 31, 2020.
2020 Highlights
- Reported net income of $434 million, or $1.62 per share
- Adjusted EBITDA1 of $659 million, for a 54% margin2
- Generated cash flow from operating activities of $564
million
- Strengthened the balance sheet with debt reduction of $400
million
- Extended our debt maturity profile to further de-risk the
balance sheet
- Maintained excellent customer service levels with 97% on-time
delivery rate
- Significantly improved safety track record with 46% reduction
in recordable injury rates
CEO Comments
“We are pleased with our overall performance during a
challenging year for the industry,” said David Rintoul, President
and Chief Executive Officer. “We made good progress managing our
business through the pandemic as we adjusted our production to
changes in demand, while being highly responsive to our customers’
needs and maintaining excellent service levels. During the fourth
quarter, we achieved sequential quarterly improvement in key
metrics such as production, sales volumes, net sales, earnings per
share, adjusted EBITDA, and cash from operating activities.”
“As we look forward, the environmental and economic advantages
of electric arc furnace steel production position both that
industry and the graphite electrode industry for 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 our company for a better
future. As we move through 2021, we believe that the improvement in
steel industry metrics will subsequently result in improved demand
for graphite electrodes,” Mr. Rintoul concluded.
Key Financial Measures
(dollars in thousands, except
per share amounts)
For the Year Ended
December 31,
Q4 2020
Q3 2020
Q4 2019
2020
2019
Net sales
$
338,010
$
286,987
$
414,612
$
1,224,361
$
1,790,793
Net income
$
125,096
$
94,234
$
174,922
$
434,374
$
744,602
Earnings per share (a)
$
0.47
$
0.35
$
0.61
$
1.62
$
2.58
Adjusted EBITDA(b)
$
175,538
$
153,105
$
234,586
$
658,946
$
1,048,259
(a)
Earnings per share represents
diluted earnings per share.
(b)
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.
Full Year and Fourth Quarter 2020 Financial
Performance
Net sales for the year ended December 31, 2020 totaled $1.2
billion compared to $1.8 billion in the prior year. Net sales for
the quarter ended December 31, 2020 were $338 million compared to
$415 million in the fourth quarter of 2019. Lower net sales were
driven primarily by lower sales volumes.
Net income for 2020 was $434 million, or $1.62 per share,
compared to $745 million, or $2.58 per share, in the prior year.
Net income for the fourth quarter of 2020 was $125 million, or
$0.47 per share, compared to $94 million, or $0.35 per share in the
third quarter of 2020 and $175 million, or $0.61 per share in the
fourth quarter of 2019.
Adjusted EBITDA was $659 million in 2020 compared to $1,048
million in the prior year. Adjusted EBITDA was $176 million in the
fourth quarter of 2020, a 15% sequential increase from $153 million
in the third quarter of 2020. Fourth quarter 2019 adjusted EBITDA
was $235 million. Year-over-year financial results for the fourth
quarter and full year 2020 were primarily impacted by lower net
sales.
Full year cash flow from operating activities was $564 million
in 2020 compared to $805 million in 2019. Cash flow from operating
activities was $147 million in the fourth quarter of 2020, a 14%
sequential increase from $129 million in the third quarter of 2020.
Fourth quarter 2019 cash flow from operating activities was $221
million.
COVID-19 and Operational Update
GrafTech continues to proactively manage through the COVID-19
crisis to support the health and safety of our team. Our plants
have remained operational and maintained a 97% on-time delivery
rate in the fourth quarter. Our global footprint gives us the
flexibility to move or adjust production as needed going
forward.
In 2020, production volume of 134 thousand MT decreased from 177
thousand MT in 2019. Production volume of 36 thousand MT in the
fourth quarter of 2020 decreased from 41 thousand MT in the fourth
quarter of 2019 and was a sequential improvement over 32 thousand
MT in the third quarter of 2020. Capacity utilization was lower as
we aligned production with reduced year-over-year sales
volumes.
Commercial Update
Late in 2020, we began seeing a measured recovery in the global
steel markets with improvement in steel pricing and capacity
utilization rates. In the fourth quarter of 2020, both the global
(ex-China) and U.S. steel market capacity utilization rates
improved to over 72%3,4.
The commercial team reported solid results in the fourth quarter
of 2020, with sales volumes of 37 thousand MT, consisting of long
term agreement (LTA) volumes of 31 thousand MT and non-LTA volumes
of 6 thousand MT. Full year 2020 sales volumes were 135 thousand
MT, consisting of LTA volumes of 113 thousand MT and non-LTA
volumes of 22 thousand MT.
During the fourth quarter, our average price from LTAs was
approximately $9,600 per MT and our average price for non-LTA
business was approximately $4,900 per MT.
During the challenging market conditions in 2020, we were able
to work with our valued customers to develop mutually beneficial
solutions to their challenges, including volume commitments. We are
pleased to have successfully negotiated LTA modifications with many
of these customers. We also continue to work to preserve our rights
under the LTAs in a few arbitrations that arose from some LTA
non-performance and other disputes during the year. The estimated
shipments of graphite electrodes for the final two years of the
initial term under our LTAs and for the years 2023 through 2024 are
as follows:
2021
2022
2023 through 2024
Estimated LTA volume(c)
98-108
95-105
35-45
Estimated LTA revenue(d)
$925-$1,025
$910-$1,010
$350-$450(e)
(c)
In thousands of MT
(d)
In millions
(e)
Includes expected termination
fees from a few customers that have failed to meet certain
obligations under their LTAs
Capital Structure and Capital Allocation
As of December 31, 2020, GrafTech had cash and cash equivalents
of $145 million and total debt of approximately $1.4 billion.
During 2020, capital allocation included $400 million of debt
repayment, $36 million of capital expenditures, $31 million of
dividend payments, and $30 million for share repurchases. In 2021,
we expect capital expenditures to range between $55 and $65 million
and our primary use of cash to continue to be debt repayment.
On December 22, 2020, we issued $500 million aggregate principal
amount of 4.625% senior secured notes due December 2028 (Notes).
The proceeds of the Notes were used to repay a portion of our
secured term loans due February 2025 under our existing credit
agreement.
Outlook
Mr. Rintoul continued, “The current market for graphite
electrodes continues to be competitive, as our industry lags the
improving fundamentals in the steel industry. If the strength in
the steel industry continues, we would expect the graphite
electrode market to improve as we move further into 2021. We remain
encouraged with the long-term growth opportunity given the benefits
of electric arc furnace steel production, and we believe GrafTech
is well positioned for success.”
Conference Call Information
In conjunction with this earnings release, you are invited to
listen to our earnings call being held on February 5, 2021 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 for
overseas calls, conference ID: 8956898. A replay of the Conference
Call will be available until May 5, 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: 8956898. A replay of the webcast
will also be available on our website until May 5, 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 (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. We are the only
large-scale graphite electrode producer that is substantially
vertically integrated into petroleum needle coke, the primary raw
material for graphite electrode manufacturing. This unique position
provides competitive advantages in product quality and cost.
_____________________________________________
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
Adjusted EBITDA margin is
calculated as Adjusted EBITDA divided by net sales (2020 Adjusted
EBITDA of $659 million/2020 net sales of $1.224 billion).
3
Source: World Steel Association
and Metal Expert
4
Source: American Iron and Steel
Institute
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 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 finalization of our financial statements as of and
for the year ended December 31, 2020, which may differ from our
current expectations and the preliminary financial information
provided in this release; 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 subject 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 the loss of our status as a “controlled
company” within the meaning of the New York Stock Exchange
corporate governance standards, which will result in us no longer
qualifying 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, June 30, 2020 and
September 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, discontinued operations
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 expenses,
non-cash gains or losses from foreign currency remeasurement of
non-operating liabilities in our foreign subsidiaries where the
functional currency is the U.S. dollar, related party Tax
Receivable Agreement expense, 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. Adjusted EBITDA margin is also a non-GAAP financial measure
used by our management and our board of directors as supplemental
information to assess the Company’s operational performance and is
calculated as adjusted EBITDA divided by net sales. In addition, we
believe adjusted EBITDA, adjusted EBITDA margin 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 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 expenses;
- adjusted EBITDA does not reflect related party Tax Receivable
Agreement expense;
- 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, adjusted EBITDA and adjusted EBITDA margin
differently, which reduces its usefulness as a comparative
measure.
In evaluating EBITDA, adjusted EBITDA and adjusted EBITDA
margin, 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, adjusted EBITDA and adjusted
EBITDA margin 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, adjusted EBITDA and adjusted EBITDA margin
alongside other financial performance measures, including our net
income (loss) and other GAAP measures.
GRAFTECH INTERNATIONAL LTD.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands)
Unaudited
As of
December 31,
2020
As of
December 31,
2019
ASSETS
Current assets:
Cash and cash equivalents
$
145,442
$
80,935
Accounts and notes receivable, net of
allowance for doubtful accounts of $8,243 as of December 31, 2020
and $5,474 as of December 31, 2019
182,647
247,051
Inventories
265,964
313,648
Prepaid expenses and other current
assets
35,114
40,946
Total current assets
629,167
682,580
Property, plant and equipment
784,902
733,417
Less: accumulated depreciation
278,685
220,397
Net property, plant and equipment
506,217
513,020
Deferred income taxes
32,551
55,217
Goodwill
171,117
171,117
Other assets
93,660
104,230
Total assets
$
1,432,712
$
1,526,164
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
70,989
$
78,697
Short-term debt
131
141
Accrued income and other taxes
48,720
65,176
Other accrued liabilities
56,501
48,335
Related party payable - tax receivable
agreement
21,752
27,857
Total current liabilities
198,093
220,206
Long-term debt
1,420,000
1,812,682
Other long-term obligations
81,478
72,562
Deferred income taxes
43,428
49,773
Related party payable - tax receivable
agreement long-term
19,098
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 and 270,485,308 shares
issued and outstanding as of December 31, 2020 and December 31,
2019, respectively
2,672
2,705
Additional paid-in capital
758,354
765,419
Accumulated other comprehensive loss
(19,641
)
(7,361
)
Accumulated deficit
(1,070,770
)
(1,451,836
)
Total stockholders’ deficit
(329,385
)
(691,073
)
Total liabilities and stockholders’
equity
$
1,432,712
$
1,526,164
GRAFTECH INTERNATIONAL LTD.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Dollars in thousands, except per
share data)
Unaudited
For the Three Months
Ended December 31,
For the Year
Ended December 31,
2020
2019
2020
2019
CONSOLIDATED STATEMENTS OF
OPERATIONS
Net sales
$
338,010
$
414,612
$
1,224,361
$
1,790,793
Cost of sales
162,485
179,322
563,864
750,390
Gross profit
175,525
235,290
660,497
1,040,403
Research and development
1,903
723
3,975
2,684
Selling and administrative expenses
17,918
17,346
67,913
63,674
Operating profit
155,704
217,221
588,609
974,045
Other expense
5,639
4,561
3,330
5,203
Related party Tax Receivable Agreement
(benefit) expense
(17,744
)
3,393
(21,090
)
3,393
Interest expense
29,048
28,859
98,074
127,331
Interest income
(168
)
(1,799
)
(1,750
)
(4,709
)
Income before provision for income
taxes
138,929
182,207
510,045
842,827
Provision for income taxes
13,833
7,285
75,671
98,225
Net income
$
125,096
$
174,922
$
434,374
$
744,602
Basic income per common share:
Net income per share
$
0.47
$
0.61
$
1.62
$
2.58
Weighted average common shares
outstanding
267,285,677
285,040,356
267,916,483
289,057,356
Diluted income per common share:
Income per share
$
0.47
$
0.61
$
1.62
$
2.58
Weighted average common shares
outstanding
267,321,380
285,079,866
267,930,644
289,074,601
GRAFTECH INTERNATIONAL LTD.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Unaudited
For the Three Months
Ended December 31,
For the Year
Ended December 31,
2020
2019
2020
2019
Cash flow from operating activities:
Net income
$
125,096
$
174,922
$
434,374
$
744,602
Adjustments to reconcile net income to
cash provided by operations:
Depreciation and amortization
17,889
15,432
62,963
61,819
Related party Tax Receivable Agreement
(benefit) expense
(17,744
)
3,393
(21,090
)
3,393
Deferred income tax provision
4,004
(11,193
)
20,241
17,503
Non-cash interest expense
9,753
1,580
14,521
6,344
Other charges, net
8,191
4,142
10,526
21,831
Net change in working capital*
1,340
32,624
86,438
(47,687
)
Change in related party Tax Receivable
Agreement
—
—
(27,857
)
—
Change in long-term assets and
liabilities
(1,548
)
(356
)
(16,470
)
(2,489
)
Net cash provided by operating
activities
146,981
220,544
563,646
805,316
Cash flow from investing activities:
Capital expenditures
(5,387
)
(20,050
)
(36,075
)
(64,103
)
Proceeds from the sale of assets
301
121
379
219
Net cash used in investing activities
(5,086
)
(19,929
)
(35,696
)
(63,884
)
Cash flow from financing activities:
Short-term debt reductions, net
(146
)
—
(146
)
—
Refinancing fees and debt issuance
costs
(6,278
)
—
(6,278
)
—
Proceeds from the issuance of long-term
debt
500,000
—
500,000
—
Repurchase of common stock - related
party
—
(250,000
)
—
(250,000
)
Repurchase of common stock - non-related
party
—
(1,384
)
(30,099
)
(10,868
)
Payment of tax withholdings related to net
share settlement of equity awards
—
—
(71
)
—
Principal repayments on long-term debt
(647,000
)
(225,140
)
(896,214
)
(350,140
)
Dividends paid to non-related party
(1,050
)
(5,108
)
(8,603
)
(20,613
)
Dividends paid to related party
(1,622
)
(19,503
)
(22,272
)
(78,010
)
Net cash used in financing activities
(156,096
)
(501,135
)
(463,683
)
(709,631
)
Net change in cash and cash
equivalents
(14,201
)
(300,520
)
64,267
31,801
Effect of exchange rate changes on cash
and cash equivalents
802
291
240
(746
)
Cash and cash equivalents at beginning of
period
158,841
381,164
80,935
49,880
Cash and cash equivalents at end of
period
$
145,442
$
80,935
$
145,442
$
80,935
* Net change in working capital due to
changes in the following components:
Accounts and notes receivable, net
$
(14,851
)
$
20,323
$
63,557
$
(404
)
Inventories
34,262
(1,641
)
44,633
(21,549
)
Prepaid expenses and other current
assets
(2,409
)
(1,774
)
3,028
3,929
Income taxes payable
(28,452
)
9,978
(12,420
)
(18,174
)
Accounts payable and accruals
12,288
5,785
(12,790
)
(11,551
)
Interest payable
502
(47
)
430
62
Net change in working capital
$
1,340
$
32,624
$
86,438
$
(47,687
)
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 Year Ended
December 31,
Q4 2020
Q3 2020
Q4 2019
2020
2019
Net income
$
125,096
$
94,234
$
174,922
$
434,374
$
744,602
Add:
Depreciation and amortization
17,889
16,241
15,432
62,963
61,819
Interest expense
29,048
22,474
28,859
98,074
127,331
Interest income
(168
)
(93
)
(1,799
)
(1,750
)
(4,709
)
Income taxes
13,833
18,104
7,285
75,671
98,225
EBITDA
$
185,698
$
150,960
$
224,699
$
669,332
$
1,027,268
Adjustments:
Pension and OPEB plan expenses (1)
4,430
583
4,330
6,096
6,727
Initial and follow-on public offering and
related expenses (2)
260
—
647
264
2,056
Non-cash loss on foreign
currency remeasurement (3)
1,738
798
942
1,297
1,784
Stock-based compensation (4)
778
764
575
2,669
2,143
Non-cash fixed asset write-off (5)
378
—
—
378
4,888
Related party Tax Receivable Agreement
adjustment (6)
(17,744
)
—
3,393
(21,090
)
3,393
Adjusted EBITDA
$
175,538
$
153,105
$
234,586
$
658,946
$
1,048,259
(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.
Key operating metrics
For the Year Ended
December 31,
(in thousands)
Q4 2020
Q3 2020
Q4 2019
2020
2019
Sales volume (MT) (1)
37
33
41
135
171
Production volume (MT) (2)
36
32
41
134
177
Production capacity excluding St. Marys
(MT) (3)(4)
52
48
52
202
202
Capacity utilization excluding St. Marys
(3)(5)
69
%
67
%
79
%
66
%
88
%
Total production capacity (MT) (4)(6)
59
55
59
230
230
Total capacity utilization (5)(6)
61
%
58
%
69
%
58
%
77
%
(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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210205005059/en/
Wendy Watson 216-676-2699
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