PARMA, Ohio--(BUSINESS WIRE)--GrafTech International Ltd. (NYSE:GTI) today announced financial results for the fourth quarter and year ended December 31, 2011.
2011 Full Year Review
- Net sales increased 31 percent to $1,320 million versus 2010 net sales of $1,007 million.
- 2011 EBITDA* was $247 million, up 23 percent year-over-year. This includes a $22 million non-cash pension related charge; 2010 included a similar charge for $7 million. Excluding this charge for both years, EBITDA* was $269 million in 2011, up 30 percent from 2010.
- Operating income was $166 million versus $158 million for 2010. Excluding the pension related charges for both years, operating income was $188 million in 2011 versus $165 million in 2010*.
- Net income was $153 million, or $1.05 earnings per diluted share. This includes a $26 million income tax benefit from the release of a valuation allowance in the fourth quarter. 2010 also included a similar tax benefit of $33 million. Excluding the tax benefit and the pension related charges, 2011 net income was $141 million, or $0.96 earnings per diluted share, versus $148 million in 2010*.
- Net cash provided by operating activities was $77 million versus $145 million in 2010.
- GrafTech successfully completed the refinancing of its principal revolving credit facility. The new five-year $570 million revolver represents a $310 million increase over the prior facility and extends the maturity date to October 2016.
- Net debt* at year end 2011 was $419 million compared to $288 million in 2010. This increase is primarily attributed to an increase in capital expenditures, working capital needs to support the 31 percent increase in sales, the fourth quarter repurchase of two million shares of GrafTech’s common stock which concluded a previously announced program, and acquisitions.
- In December 2011, the Board of Directors approved a new GrafTech share repurchase program for up to ten million shares of its common stock.
- Moody’s upgraded GrafTech’s corporate rating to Ba1 and rated the $570 million senior secured revolving credit facility investment grade, Baa3.
- GrafTech successfully completed the acquisitions of Micron Research and Fiber Materials, Inc. (FMI). These acquisitions strengthen the Engineered Solutions business segment positioning GrafTech for further penetration into the markets requiring super-fine grain graphite and highly engineered advanced carbon composites.
2011 Fourth Quarter Highlights
- Net sales increased 24 percent to $348 million compared to net sales of $281 million in the fourth quarter of 2010.
- EBITDA* improved to $52 million, up 20 percent versus same quarter last year. This includes a $22 million non-cash pension related charge; 2010 included a similar charge for $7 million. Excluding this charge for the fourth quarter of both years, EBITDA* was $75 million for the fourth quarter in 2011, up 47 percent versus the same time period in 2010.
- Operating income was $31 million for the fourth quarter versus $30 million for the same period in 2010. Excluding the pension related charges for the fourth quarter of both years, operating income was $54 million in 2011 versus $38 million in 2010*.
- Net income was $57 million, or $0.39 earnings per diluted share. This includes a $26 million income tax benefit from the release of a valuation allowance. 2010 also included a similar income tax benefit of $33 million. Excluding this item and the pension related charges, fourth quarter 2011 net income was $45 million, or $0.31 per diluted share compared to fourth quarter 2010 net income of $46 million, or $0.36 per diluted share*.
Acquisition Updates
Over the past two years, GrafTech has closed on four acquisitions that enhance both our Industrial Materials and Engineered Solutions business segments furthering our strategic goals of continued and sustainable growth. Both Seadrift and St. Marys integrations are complete with both businesses contributing approximately $91 million of EBITDA in 2011. The integration of our latest two acquisitions, Micron Research and FMI, are on track to be completed in 2012.
Industrial Materials Segment
The Industrial Materials segment’s net sales for the fourth quarter of 2011 were $297 million, as compared to $234 million in the fourth quarter of 2010. Net sales in the quarter increased primarily as a result of higher graphite electrode and needle coke sales volume.
Operating income for the Industrial Materials segment was $49 million in the fourth quarter of 2011 as compared to $31 million in the fourth quarter of 2010 excluding pension related charges*.
Engineered Solutions Segment
Net sales for the Engineered Solutions segment were $51 million in the fourth quarter of 2011 as compared to $47 million in the fourth quarter of 2010. Operating income was $4 million in the fourth quarter of 2011 as compared to $6 million in the fourth quarter of 2010 excluding the pension related charges*. The decrease in operating income was primarily due to a decline in the solar market demand and the economic slowdown in Europe.
Corporate
Total company selling and administrative and research and development expenses were $52 million for the fourth quarter of 2011. This compares to overhead expense for the same time period last year of $38 million. The year-over-year increase was driven by $9 million of the pension related charges with the remainder of the increase primarily driven by the previously existing overhead and the amortization of intangible assets acquired from our acquisitions.
Outlook
The International Monetary Fund (IMF) in its latest report dated January 24, 2012, projected world output to expand by approximately 3.25 percent in 2012. This projection represents the second time since June 2011 they have reduced their numbers as the global recovery continues to move at a slower pace. The IMF highlighted that downside risks have intensified globally over the past few months. Additionally, they are now projecting a mild recession in Europe as a result of the continued European debt crisis. Also noting the slowdown in Europe, The European Steel Association’s February 3, 2012 report stated that they expect recessionary conditions to continue throughout 2012.
According to the World Steel Association, total steel production declined approximately 5 percent from the third quarter to the fourth quarter in 2011, with Europe accounting for much of the decline. GrafTech also saw an impact in the fourth quarter sales to steel producers in that region as a number of our customers reduced their production levels, closed furnaces and executed sizeable layoffs. Historically, GrafTech has had approximately 30 percent of total company annual sales in Europe.
As a result of the above, we are expecting lower sales volume of graphite electrodes compared to last year in our Industrial Materials business. Our 2012 graphite electrode book building continues to lag behind prior years, especially in Europe, as customers continue to assess their 2012 requirements. In addition, some customers in Europe have carry over inventory of electrodes due to their low production rates in the fourth quarter, however we expect the average price of all the grades of electrodes we sell to be up 10 to 15 percent, which will help offset cost pressures.
In our Engineered Solutions business we have also felt the slowdown in the European region and in the solar sector. Globally, the solar industry continued to reduce production and is expected to be at levels significantly below 2011. Recovery in solar is not expected until late 2012 or 2013.
Considering the above economic conditions, we are targeting 2012 EBITDA to be in the range of $250 million to $290 million. We expect that the first quarter will be our weakest with EBITDA targeted to be in the range of $35 million to $45 million due primarily to the low steel production rates in the fourth quarter causing customers to carry extra graphite electrode inventory into the first quarter of 2012.
In summary, our expectations for 2012 are as follows:
- EBITDA targeted in the range of $250 million to $290 million;
- Overhead expense (selling and administrative, and research and development expenses) of approximately $170 million;
- Interest expense in the range of $18 million to $22 million;
- Capital expenditures of approximately $140 million to $160 million;
- Depreciation expense of approximately $95 million;
- An effective tax rate in the range of 23 percent to 25 percent;
- Cash flow from operations in the range of $140 million to $170 million; and
- Fully diluted share count of approximately 145 million shares.
In conjunction with this earnings release, you are invited to listen to our earnings call being held today at 11:00 a.m. Eastern. The call will be webcast and available at www.graftech.com, in the investor relations section. The earnings call dial-in number is 877-736-7716 for domestic and 706-501-7465 for international. A rebroadcast webcast will be available following the call, and for 30 days thereafter, at www.graftech.com, in the investor relations section. GrafTech also makes its complete financial reports that have been filed with the Securities and Exchange Commission available at www.graftech.com. This includes its annual report on Form 10-K for the period reported. Upon request, GrafTech will provide its stockholders with a hard copy of its complete audited financial statement, free of charge.
GrafTech International Ltd. is one of the world’s largest manufacturers and providers of high quality synthetic and natural graphite and carbon based products and technical and research and development services, with customers in 70 countries engaged in the manufacture of steel, automotive products and electronics. We manufacture graphite electrodes, products essential to the production of electric arc furnace steel and petroleum needle coke, the raw material essential to the production of graphite electrodes. We also manufacture thermal management, fuel cell and other specialty graphite and carbon products for, and provide services to, the electronics, power generation, solar, oil and gas, transportation, defense, petrochemical and other metals markets. We operate 19 manufacturing facilities strategically located on four continents. For additional information on GrafTech International Ltd., call 216-676-2000, or visit our website at www.graftech.com.
NOTE ON FORWARD-LOOKING STATEMENTS: This news release and related discussions may contain forward-looking statements about such matters as: our outlook for 2012; growth prospects; the markets we serve; our profitability, cash flow, and liquidity; future sales, costs, working capital, revenues, and business opportunities; future operational performance; strategic plans; stock repurchase plans; supply chain management; the impact of cost competitiveness and liquidity initiatives; changes in production capacity, operating rates or efficiency; capital expenditures; future prices and demand for our products; product quality; the impact of acquired businesses; investments and acquisitions that we may make in the future; the integration of acquisitions into our operations; financing (including factoring and supply chain financing) activities; debt levels; our customers' operations, production levels and demand for their products; our position in markets we serve; regional and global economic and industry market conditions, including our expectations concerning their impact on us and our customers and suppliers; conditions and changes in the global financial and credit markets; tax rates and the effects of jurisdictional mix; the impact of accounting changes; depreciation and amortization expenses and currency exchange and interest rates and expenses.
We have no duty to update these statements. Our expectations and targets are not predictions of actual performance and historically our performance has deviated, often significantly, from our expectations and targets. Actual future events, circumstances, performance and trends could differ materially, positively or negatively, from those set forth in these statements due to various factors, including: the extent of any adjustments to our announced 2011 fourth quarter and full year results; the actual timing of the filing of our Form 10-K with the SEC and potential effects of delays in such filing; failure to achieve earnings or other estimates; failure to successfully develop and commercialize new or improved products; adverse changes in inventory or supply chain management; limitations or delays on capital expenditures; business interruptions; delays or changes in or non-consummation of investments or acquisitions that we may make in the future; failure to successfully integrate into our business any completed investments and acquisitions; failure to achieve expected synergies or the performance or returns expected from any completed investments or acquisitions; inability to protect our intellectual property rights or infringement of intellectual property rights of others; changes in market prices of our securities; changes in our ability to obtain financing on acceptable terms; adverse changes in labor relations; adverse developments in legal proceedings; non-realization of anticipated benefits from organizational changes and restructurings; negative developments relating to health, safety or environmental compliance or remediation or liabilities; downturns, production reductions or suspensions, or changes in steel and other markets we or our customers serve; political unrest which adversely impacts us or our customers’ businesses; declines in demand; intensified competition and price or margin decreases, including growth by producers in developing countries; graphite electrode and needle coke manufacturing capacity increases; adverse differences between actual graphite electrode prices and spot or announced prices; consolidation of steel producers; mismatches between manufacturing capacity and demand; significant changes in our provision for income taxes and effective income tax rate; changes in the availability or cost of key inputs, including petroleum-based coke or energy; changes in interest or currency exchange rates; inflation or deflation; failure to satisfy conditions to government grants; changes in government fiscal and monetary policy; a protracted regional or global financial or economic crisis; and other risks and uncertainties, including those detailed in our SEC filings, as well as future decisions by us. This news release does not constitute an offer or solicitation as to any securities. References to street or analyst earnings estimates mean those published by First Call.
*Non-GAAP financial measures. See attached reconciliations.
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES |
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At December 31, |
At December 31, |
|||||||||||
| ASSETS | ||||||||||||
| Current Assets: | ||||||||||||
| Cash and cash equivalents | $ | 13,096 |
|
$ |
12,429 | |||||||
| Accounts and notes receivable, net of allowance for doubtful accounts of $3,892 at December 31, 2010 and $4,153 at December 31, 2011 | 179,755 | 253,151 | ||||||||||
| Inventories | 340,418 | 444,062 | ||||||||||
| Prepaid expenses and other current assets | 12,615 | 22,308 | ||||||||||
| Total current assets | 545,884 | 731,950 | ||||||||||
| Property, plant and equipment | 1,328,004 | 1,431,432 | ||||||||||
| Less: accumulated depreciation | 635,530 | 654,548 | ||||||||||
| Net property, plant and equipment | 692,474 | 776,884 | ||||||||||
| Deferred income taxes | 6,746 | 7,931 | ||||||||||
| Goodwill | 499,238 | 498,681 | ||||||||||
| Other assets | 168,841 | 152,920 | ||||||||||
| Total assets | $ | 1,913,183 |
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$ |
2,168,366 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 69,930 |
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$ |
74,280 | |||||||
| Short-term debt | 155 | 14,168 | ||||||||||
| Accrued income and other taxes | 30,019 | 44,330 | ||||||||||
| Supply chain financing liability | 24,959 | 29,930 | ||||||||||
| Other accrued liabilities | 95,580 | 114,545 | ||||||||||
| Total current liabilities | 220,643 | 277,253 | ||||||||||
| Long-term debt | 275,799 | 387,624 | ||||||||||
| Other long-term obligations | 114,728 | 131,300 | ||||||||||
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Deferred income taxes |
72,287 | 32,245 | ||||||||||
| Stockholders’ equity: | ||||||||||||
| Preferred stock, par value $.01, 10,000,000 shares authorized, none issued | - | - | ||||||||||
| Common stock, par value $.01, 225,000,000 shares authorized, 149,063,197 shares issued at December 31, 2010 and 149,861,081 shares issued at December 31, 2011 | 1,491 | 1,499 | ||||||||||
| Additional paid-in capital | 1,782,859 | 1,798,161 | ||||||||||
| Accumulated other comprehensive loss | (235,758 | ) | (261,937 | ) | ||||||||
| Accumulated deficit | (203,941 | ) | (50,757 | ) | ||||||||
| Less: cost of common stock held in treasury, 4,081,134 shares at December 31, 2010 and 6,265,114 at December 31, 2011 | (113,942 | ) | (146,041 | ) | ||||||||
| Less: common stock held in employee benefit and compensation trusts, 76,259 shares at December 31, 2010 and 75,807 shares at December 31, 2011 | (983 | ) | (981 | ) | ||||||||
| Total stockholders’ equity | 1,229,726 | 1,339,944 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 1,913,183 |
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$ |
2,168,366 | |||||||
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share and per share data) (Unaudited) |
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For the |
For the |
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| 2010 | 2011 | 2010 | 2011 | |||||||||||||||||
| Net sales | $ | 281,239 | $ | 347,984 | $ | 1,006,993 | $ | 1,320,184 | ||||||||||||
| Cost of sales | 213,423 | 264,276 | 717,742 | 995,638 | ||||||||||||||||
| Gross profit | 67,816 | 83,708 | 289,251 | 324,546 | ||||||||||||||||
| Research and development | 3,241 | 5,120 | 12,202 | 13,976 | ||||||||||||||||
| Selling and administrative expenses | 34,431 | 47,285 | 119,009 | 144,561 | ||||||||||||||||
| Operating income | 30,144 | 31,303 | 158,040 | 166,009 | ||||||||||||||||
| Equity in losses (earnings) of, write-down of investment in and gain recorded on acquisition of non-consolidated affiliate | (12,174 | ) | - | (14,500 | ) | - | ||||||||||||||
| Other (income) expense, net | (3,024 | ) | (299 | ) | (4,768 | ) | 4,835 | |||||||||||||
| Interest expense | 2,013 | 4,527 | 5,076 | 18,307 | ||||||||||||||||
| Interest income | (105 | ) | (61 | ) | (1,333 | ) | (424 | ) | ||||||||||||
| Income before benefit from income taxes | 43,434 | 27,136 | 173,565 | 143,291 | ||||||||||||||||
| Benefit from income taxes | (29,489 | ) | (29,919 | ) | (1,095 | ) | (9,893 | ) | ||||||||||||
| Net income | $ | 72,923 | $ | 57,055 | $ | 174,660 | $ | 153,184 | ||||||||||||
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Basic income per common share: |
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| Net income per share | $ | 0.57 | $ | 0.39 | $ | 1.42 | $ | 1.06 | ||||||||||||
| Weighted average common shares outstanding | 128,863 | 144,642 | 122,621 | 145,156 | ||||||||||||||||
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Diluted income per common share: |
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Net income per share |
$ | 0.56 | $ | 0.39 | $ | 1.41 | $ | 1.05 | ||||||||||||
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Weighted average common shares outstanding |
129,816 | 145,678 | 123,453 | 146,402 | ||||||||||||||||
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) |
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For the |
For the |
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| 2010 | 2011 | 2010 | 2011 | |||||||||||||||||
| Cash flow from operating activities: | ||||||||||||||||||||
| Net income | $ | 72,923 | $ | 57,055 | $ | 174,660 | $ | 153,184 | ||||||||||||
| Adjustments to reconcile net income to cash provided by operations: | ||||||||||||||||||||
| Depreciation and amortization | 13,489 | 21,271 | 42,664 | 81,953 | ||||||||||||||||
| Deferred income tax benefit | (32,165 | ) | (49,873 | ) | (29,028 | ) | (45,053 | ) | ||||||||||||
| Equity in losses (earnings) of, write-down of investment in and gain recorded on acquisition of non-consolidated affiliate | (12,174 | ) | - | (14,500 | ) | - | ||||||||||||||
| Post-retirement and pension plan changes | 8,334 | 24,062 | 11,088 | 27,184 | ||||||||||||||||
| Currency gains | (2,867 | ) | (577 | ) | (7,153 | ) | (1,463 | ) | ||||||||||||
| Stock-based compensation, including incentive compensation paid in company stock | 2,402 | 2,856 | 7,355 | 8,910 | ||||||||||||||||
| Interest expense | 1,200 | 2,948 | 2,620 | 11,607 | ||||||||||||||||
| Other charges (credits), net | 3,234 | (4,280 | ) | 4,299 | (11,201 | ) | ||||||||||||||
| Decrease (increase) in working capital* | 37,377 | (2,768 | ) | (41,790 | ) | (142,587 | ) | |||||||||||||
| Increase in long-term assets and liabilities | (858 | ) | (3,393 | ) | (5,293 | ) | (5,937 | ) | ||||||||||||
| Net cash provided by operating activities | 90,895 | 47,301 | 144,922 | 76,597 | ||||||||||||||||
| Cash flow from investing activities: | ||||||||||||||||||||
| Capital expenditures | (34,594 | ) | (54,598 | ) | (86,049 | ) | (156,616 | ) | ||||||||||||
| Loan repayment from non-consolidated affiliate | - | - | 6,000 | - | ||||||||||||||||
| (Payments) proceeds from derivative instruments | (2,087 | ) | 6,640 | (1,109 | ) | 14,412 | ||||||||||||||
| Cash paid for acquisitions net of cash acquired of $8,240 | (241,204 | ) | (14,010 | ) | (241,204 | ) | (20,510 | ) | ||||||||||||
| Other | 1,064 | 320 | 810 | 748 | ||||||||||||||||
| Net cash used in investing activities | (276,821 | ) | (61,648 | ) | (321,552 | ) | (161,966 | ) | ||||||||||||
| Cash flow from financing activities: | ||||||||||||||||||||
| Short-term debt borrowings (reductions), net | 18 | (4,014 | ) | (850 | ) | 14,016 | ||||||||||||||
| Revolving Facility borrowings | 165,000 | 407,000 | 165,000 | 584,000 | ||||||||||||||||
| Revolving Facility reductions | (35,000 | ) | (358,000 | ) | (35,000 | ) | (482,000 | ) | ||||||||||||
| Principal payments on long-term debt | - | (44 | ) | (56 | ) | (222 | ) | |||||||||||||
| Supply chain financing | (501 | ) | 7,927 | 10,555 | 4,970 | |||||||||||||||
| Proceeds from exercise of stock options | 2,767 | 111 | 3,901 | 2,028 | ||||||||||||||||
| Purchase of treasury shares | (249 | ) | (30,257 | ) | (1,431 | ) | (30,940 | ) | ||||||||||||
| Excess tax benefit from stock-based compensation | 905 | (2,051 | ) | 1,864 | (946 | ) | ||||||||||||||
| Long-term financing obligations | (291 | ) | (21 | ) | (1,148 | ) | (457 | ) | ||||||||||||
| Revolver facility refinancing cost | (85 | ) | (4,988 | ) | (4,595 | ) | (4,988 | ) | ||||||||||||
| Net cash provided by financing activities | 132,564 | 15,663 | 138,240 | 85,461 | ||||||||||||||||
| Net (decrease) increase in cash and cash equivalents | (53,362 | ) | 1,316 | (38,390 | ) | 92 | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (45 | ) | (227 | ) | 1,305 | (759 | ) | |||||||||||||
| Cash and cash equivalents at beginning of period | 66,503 | 11,340 | 50,181 | 13,096 | ||||||||||||||||
| Cash and cash equivalents at end of period | $ | 13,096 | $ | 12,429 | $ | 13,096 | $ | 12,429 | ||||||||||||
| * Net change in working capital due to the following components: | ||||||||||||||||||||
| Decrease (increase) in current assets: | ||||||||||||||||||||
| Accounts and notes receivable, net | $ | 2,529 | $ | (13,548 | ) | $ | (39,780 | ) | $ | (68,462 | ) | |||||||||
| Effect of factoring of accounts receivable | - | - | (1,115 | ) | - | |||||||||||||||
| Inventories | 25,333 | (35,188 | ) | (13,641 | ) | (111,395 | ) | |||||||||||||
| Prepaid expenses and other current assets | 1,135 | 3,268 | (1,719 | ) | (2,082 | ) | ||||||||||||||
| Restructuring payments | (185 | ) | - | (809 | ) | - | ||||||||||||||
| Increase in accounts payables and accruals | 8,292 | 42,356 | 15,029 | 39,097 | ||||||||||||||||
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Increase in interest payable |
273 | 344 | 245 | 255 | ||||||||||||||||
| Decrease (increase) in working capital | $ | 37,377 | $ | (2,768 | ) | $ | (41,790 | ) | $ | (142,587 | ) | |||||||||
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES SEGMENT DATA SUMMARY (Dollars in thousands) (Unaudited) |
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For the |
For the |
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| 2010 | 2011 | 2010 | 2011 | |||||||||||||||||
| Net sales: | ||||||||||||||||||||
| Industrial Materials | $ | 234,498 | $ | 296,603 | $ | 833,892 | $ | 1,132,194 | ||||||||||||
| Engineered Solutions | 46,741 | 51,381 | 173,101 | 187,990 | ||||||||||||||||
| Total net sales | $ | 281,239 | $ | 347,984 | $ | 1,006,993 | $ | 1,320,184 | ||||||||||||
| Segment operating income: | ||||||||||||||||||||
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Industrial Materials |
$ | 26,232 | $ | 38,083 | $ | 140,217 | $ | 158,547 | ||||||||||||
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Engineered Solutions |
3,912 | (6,780 | ) | 17,823 | 7,462 | |||||||||||||||
| Total segment operating income | $ | 30,144 | $ | 31,303 | $ | 158,040 | $ | 166,009 | ||||||||||||
| Operating income margin: | ||||||||||||||||||||
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Industrial Materials |
11.2 | % | 12.8 | % | 16.8 | % | 14.0 | % | ||||||||||||
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Engineered Solutions |
8.4 | % | -13.2 | % | 10.3 | % | 4.0 | % | ||||||||||||
| Total operating income margin | 10.7 | % | 9.0 | % | 15.7 | % | 12.6 | % | ||||||||||||
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES (Dollars in thousands) (Unaudited) |
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EBITDA* Reconciliation |
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For the |
For the |
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2010 |
2011 |
2010 |
2011 |
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| Net sales | $ | 281,239 | $ | 347,984 | $ | 1,006,993 | $ | 1,320,184 | ||||||||||||
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Net income |
$ | 72,923 | $ | 57,055 | $ | 174,660 | $ | 153,184 | ||||||||||||
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Add: |
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| Income taxes | (29,489 | ) | (29,919 | ) | (1,095 | ) | (9,893 | ) | ||||||||||||
| Equity in losses (earnings) of, write-down of investment in and gain recorded on acquisition of non-consolidated affiliate | (12,174 | ) | - | (14,500 | ) | - | ||||||||||||||
| Other (income) expense, net | (3,024 | ) | (299 | ) | (4,768 | ) | 4,835 | |||||||||||||
| Interest expense | 2,013 | 4,527 | 5,076 | 18,307 | ||||||||||||||||
| Interest income | (105 | ) | (61 | ) | (1,333 | ) | (424 | ) | ||||||||||||
| Depreciation and amortization | 13,324 | 21,033 | 42,002 | 80,998 | ||||||||||||||||
| EBITDA | $ | 43,468 | $ | 52,336 | $ | 200,042 | $ | 247,007 | ||||||||||||
| Excluding Mark to Market Adjustment | 7,369 | 22,263 | 7,369 | 22,263 | ||||||||||||||||
| EBITDA adjusted | $ | 50,837 | $ | 74,599 | $ | 207,411 | $ | 269,270 | ||||||||||||
*Non-GAAP financial measures. Please see GrafTech’s SEC filing for description of pension related Mark to Market accounting treatment.
NOTE ON EBITDA RECONCILIATION: EBITDA and EBITDA adjusted (EBITDA
measures) is a non-GAAP financial measure that GrafTech currently
calculates according to the schedule above, using GAAP amounts from the
Consolidated Financial Statements. GrafTech believes that EBITDA
measures are generally accepted as providing useful information
regarding a company’s ability to incur and service debt. GrafTech also
believes that EBITDA measures provide useful information about the
productivity and cash generation potential of its ongoing businesses.
Management uses EBITDA measures as well as other financial measures in
connection with its decision-making activities. EBITDA measures should
not be considered in isolation or as a substitute for net income (loss),
cash flows from operations or other consolidated income or cash flow
data prepared in accordance with GAAP. GrafTech’s method for calculating
EBITDA measures may not be comparable to methods used by other companies
and is not the same as the method for calculating EBITDA measures under
its senior secured revolving credit facility.
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES (Dollars in thousands) (Unaudited) |
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Operating Income* Reconciliation |
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For the |
For the |
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2010 | 2011 | 2010 | 2011 | |||||||||||||
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Total Company |
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| Operating income | $ | 30,144 | $ | 31,303 | $ | 158,040 | $ | 166,009 | |||||||||
| Mark to Market Pension Adjustment | 7,369 | 22,263 | 7,369 | 22,263 | |||||||||||||
| Adjusted Operating Income | $ | 37,513 | $ | 53,566 | $ | 165,409 | $ | 188,272 | |||||||||
|
For the |
For the |
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|
|
2010 | 2011 | 2010 | 2011 | |||||||||||||
|
Industrial Materials |
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| Operating income | $ | 26,232 | $ | 38,083 | $ | 140,217 | $ | 158,547 | |||||||||
| Mark to Market Pension Adjustment | 4,910 | 11,261 | 4,910 | 11,261 | |||||||||||||
| Adjusted Operating Income | $ | 31,142 | $ | 49,344 | $ | 145,127 | $ | 169,808 | |||||||||
|
For the |
For the |
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|
|
2010 | 2011 | 2010 | 2011 | |||||||||||||
|
Engineered Solutions |
|||||||||||||||||
| Operating income | $ | 3,912 | $ | (6,780 | ) | $ | 17,823 | $ | 7,462 | ||||||||
| Mark to Market Pension Adjustment | 2,458 | 11,002 | 2,458 | 11,002 | |||||||||||||
| Adjusted Operating Income | $ | 6,370 | $ | 4,222 | $ | 20,281 | $ | 18,464 | |||||||||
*Non-GAAP financial measures. Please see GrafTech’s SEC filing for description of pension related Mark to Market accounting treatment.
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES (Dollars in thousands) (Unaudited) |
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|
Net Income* Reconciliation |
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|
For the |
For the |
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|
|
2010 | 2011 | 2010 | 2011 | ||||||||||||||||
|
Total Company |
||||||||||||||||||||
| Net Income | $ | 72,923 | $ | 57,055 | $ | 174,660 | $ | 153,184 | ||||||||||||
| Valuation Allowance Release | (32,597 | ) | (26,463 | ) | (32,597 | ) | (26,463 | ) | ||||||||||||
| Mark to Market Pension Adjustment (after tax) | $ | 6,055 | $ | 14,238 | $ | 6,055 | $ | 14,238 | ||||||||||||
| Adjusted Net Income | $ | 46,381 | $ | 44,830 | $ | 148,118 | $ | 140,959 | ||||||||||||
*Non-GAAP financial measures. Please see GrafTech’s SEC filing for description of pension related Mark to Market accounting treatment.
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES (Dollars in thousands) (Unaudited) |
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|
Net Debt Reconciliation |
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|
At December 31, |
At December 31, |
|||||||||
| Long-term debt | $ | 275,799 | $ | 387,624 | ||||||
| Short-term debt | 155 | 14,168 | ||||||||
| Supply chain financing | 24,959 | 29,930 | ||||||||
| Total debt | $ | 300,913 | $ | 431,722 | ||||||
| Less: | ||||||||||
| Cash and cash equivalents | 13,096 | 12,429 | ||||||||
|
Net Debt |
$ |
287,817 |
$ |
419,293 | ||||||
NOTE ON NET DEBT RECONCILIATION: Net debt is a non-GAAP financial measure that GrafTech calculates according to the schedule above, using GAAP amounts from the Consolidated Financial Statements. GrafTech excludes cash and cash equivalents from net debt. GrafTech believes that net debt is generally accepted as providing useful information regarding a company’s indebtedness and that net debt provides meaningful information to investors to assist them to analyze leverage. Management uses net debt as well as other financial measures in connection with its decision-making activities. Net debt should not be considered in isolation or as a substitute for total debt or total debt and other long-term obligations calculated in accordance with GAAP. GrafTech’s method for calculating net debt may not be comparable to methods used by other companies and is not the same as the method for calculating net debt under its senior secured revolving credit facility.
GTI-G